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| Dexia bank gets massive bailout | |
| (40 minutes later) | |
| France, Belgium and Luxembourg are to bail out the troubled bank Dexia, following fears it could go bankrupt. | France, Belgium and Luxembourg are to bail out the troubled bank Dexia, following fears it could go bankrupt. |
| The Belgian government will buy the bank's division in Belgium for 4bn euros ($5.4bn; £3.4bn). | The Belgian government will buy the bank's division in Belgium for 4bn euros ($5.4bn; £3.4bn). |
| The largely retail operation has 6,000 staff and deposits totalling 80bn euros for four million customers. | The largely retail operation has 6,000 staff and deposits totalling 80bn euros for four million customers. |
| The plan came after German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed Europe's crisis-hit banks needed to be recapitalised. | The plan came after German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed Europe's crisis-hit banks needed to be recapitalised. |
| Dexia also secured state guarantees of up to 90bn euros to secure borrowing over the next 10 years. Belgium will provide 60.5% of these guarantees, France 36.5% Luxembourg 3%, the bank said in a statement. | Dexia also secured state guarantees of up to 90bn euros to secure borrowing over the next 10 years. Belgium will provide 60.5% of these guarantees, France 36.5% Luxembourg 3%, the bank said in a statement. |
| Belgian Prime Minister Yves Leterme told a news conference in the early hours of Monday: "We found an agreement on the fair division of the costs related to the management of the 'rest bank'." | Belgian Prime Minister Yves Leterme told a news conference in the early hours of Monday: "We found an agreement on the fair division of the costs related to the management of the 'rest bank'." |
| Dexia asked for help for the second time in three years after a liquidity squeeze sent its shares tumbling. | Dexia asked for help for the second time in three years after a liquidity squeeze sent its shares tumbling. |
| It had to be bailed out in 2008, with the Belgian, French and Luxembourg governments putting in 6.4bn euros to keep it afloat. | It had to be bailed out in 2008, with the Belgian, French and Luxembourg governments putting in 6.4bn euros to keep it afloat. |
| Marathon talks | Marathon talks |
| The latest announcement came after a board meeting that lasted some 14 hours from mid-afternoon on Sunday. | The latest announcement came after a board meeting that lasted some 14 hours from mid-afternoon on Sunday. |
| The situation with Dexia is the latest warning sign over the health of Europe's lenders. It has a global credit risk exposure of around $700bn, twice the gross domestic product of Greece. | The situation with Dexia is the latest warning sign over the health of Europe's lenders. It has a global credit risk exposure of around $700bn, twice the gross domestic product of Greece. |
| BBC business editor Robert Peston said that given the size of Dexia, with a balance sheet of over 500bn euros, eurozone governments viewed its rescue as vital to avoid more market turmoil. | BBC business editor Robert Peston said that given the size of Dexia, with a balance sheet of over 500bn euros, eurozone governments viewed its rescue as vital to avoid more market turmoil. |
| Under the plan, Dexia's French municipal finance operations will come under state control. The bank is also expected to announce the planned sale of its healthy businesses, such as Denizbank in Turkey. | Under the plan, Dexia's French municipal finance operations will come under state control. The bank is also expected to announce the planned sale of its healthy businesses, such as Denizbank in Turkey. |
| The burden of bailing out Dexia led to a warning from the ratings agency Moody's that it could cut its rating on Belgium's government bonds. | The burden of bailing out Dexia led to a warning from the ratings agency Moody's that it could cut its rating on Belgium's government bonds. |