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Greek Tragedy: Break-Up of French Bank Dexia Reverberates Throughout Europe
October 6, 2011
Dexia, a major European bank swimming in 3.4bn euros of Greek sovereign debt, whose publicly traded shares have suffered a 66% drop, now appears to be entering the final days of its independent corporate life. On Tuesday, French and Belgian officials came to its rescue, agreeing to backstop the bank's finances - just 3 years after bailing out the bank during the financial crisis.
Dexia has taken the first step in dismantling its financial empire. It says it has found a possible buyer for its Luxembourg unit.
Shares of Dexia were in a free fall early this week, prompting the France and Belgium guarantees. On Thursday, shares fell another 17%, which led the Belgian market regulator to suspended trading in the stock until it could gather more information about the prospective sale and learn about a broader plan to sell all its troubled assets.
The fear in Europe is that this scenario can be a prelude to many other bank failures. [Dealbook, 10/6/11]

