Arab Today, arab today dexia bank warns windingup would pose systemic danger
Last Updated : GMT 15:29:56
Arab Today, arab today
Arab Today, arab today

Dexia bank warns winding-up would pose systemic danger

Arab Today, arab today

Arab Today, arab today Dexia bank warns winding-up would pose systemic danger

Paris - AFP

The board of rescued Dexia bank warned on Wednesday that any rapid winding up of the French-Belgian bank could pose a systemic danger to European finance and activate huge government guarantees. The warning came in a notice to shareholders who are due to vote on December 21 to endorse a new plan for a change in the way the French and Belgian governments share state guarantees for the bank. The scheme remains subject to approval by European Union competition authorities. Under the deal, the French and Belgian governments agree to provide a new round of support for the bank with extra capital of 5.5 billion euros ($7.0 billion). With the bank effectively finished as a going concern, but kept artificially alive with state guarantees, shareholders can expect no dividends or rise of the share value. The board warned that if the bank were wound up, there would be \"very serious systemic consequences.\" It said that if Dexia assets were offloaded quickly they would lead to book losses higher than the bank\'s capitalisation. A subsidiary focused on financing local authorities, and which was liable for a large part of the group\'s commitments, would then be liable immediately to pay its debts. The board warned that these liabilities in September amounted to 386.5 billion euros to which another 605 billion euros could be added if derivative instruments were also taken into account. This would amount to a default of such magnitude that \"it would threaten the whole of the European financial system\", create panic on the markets \"and effect their liquidity\" as well as spread \"contagion\" in the euro zone, the board said. The remarks referred to holdings by the bank, at the end of September, of sovereign bonds with a theoretical value of 20 billion euros. If Dexia had to offload these urgently, the sales would depress market prices and destabilise trading particularly in the eurozone. About 70 percent of the bonds are bonds issued by the public sector in the eurozone. Another likely effect would be that Dexia would have to make use of guarantees provided by the French, Belgian and Luxembourg governments. That would mean that these governments would have to repay those debts covered by the guarantees. The board said that on November 12, the total of the bonds covered by these state guarantees was 73.4 billion euros.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today dexia bank warns windingup would pose systemic danger Arab Today, arab today dexia bank warns windingup would pose systemic danger

 



Arab Today, arab today
Arab Today, arab today Saudis await visitors but will they come?

GMT 11:54 2017 Thursday ,23 February

Saudis await visitors but will they come?
Arab Today, arab today Sarah Belamesh designs antiques of "ceramic"

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"
Arab Today, arab today Blind sheikh buried in Egypt

GMT 06:32 2017 Thursday ,23 February

Blind sheikh buried in Egypt
Arab Today, arab today Media host Mona Iraqi stresses her show's success

GMT 15:32 2017 Wednesday ,22 February

Media host Mona Iraqi stresses her show's success
View News in Arabic - Business: مصارف
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today To hold social dialogue over secondary school

GMT 07:43 2017 Wednesday ,22 February

To hold social dialogue over secondary school
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Salma Rashid happy for 'A Whisper of Love'

GMT 05:19 2017 Tuesday ,21 February

Salma Rashid happy for 'A Whisper of Love'
Arab Today, arab today Milan laughs while Rome cries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 06:41 2017 Monday ,20 February

Janat pleased for issuing 'Good Morning'

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 14:29 2017 Monday ,20 February

Prepares to present her new collection

GMT 15:53 2017 Tuesday ,21 February

Small ponds have outsized impact

GMT 23:29 2017 Thursday ,16 February

Home built on sand castles-style costs $8m

GMT 07:51 2017 Wednesday ,22 February

Mom's immune system accepts babies

GMT 17:46 2017 Saturday ,18 February

Tourist guide reveals methods of tourist attractions

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 19:10 2017 Friday ,17 February

Hats, scarves add beauty to women
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday