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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]