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De Tijd Reports Dexia To Be Nationalized

Tyler Durden's picture





 

As predicted, the Dexia "bad bank" rumor lasted all of, oh, 24 hours. After exhausting all talking points, French and Belgian politicians took out the abacus and were horrified to learn, as we suggested, that any implicit backstop would cost them dearly, and in France's case, at least one A of those critical AAAs that continue to keep Europe afloat. So implicit moves to explicit and as Belgian De Tijd reports, "the Belgian government will nationalize Dexia Bank Belgium." From the article: "the federal government came together this morning to rule on the future of Dexia Bank Belgium. There were several scenarios on the table. One was the nationalization of Dexia Bank Belgium (DBB) . This means that the Belgian state will buy DBB to quickly resell in the future. The disadvantage of this scenario is that the shareholders suffer most because they are left with the unhealthy parts of the group (the bad bank)." It also means that Belgium can kiss its sterling credit rating goodbye, and its CDS will continue going up until it meets that of Dexia, which will now have the same implied risk as that of the government about to consume it. Two questions arise next: will the website of Dexia be down indefinitely as locals decide that keeping their money in an insolvent bank may not be the best option, and, secondly, who will nationalize a governmentless Belgium next?

The balance of the article, Google Translated:

Yesterday worked Acro shareholder, Holding Communal, Ethias and the regions have an alternative plan from. That amounted to a separate listing for the bank and a nationalization or sale would be avoided. This would still "something" in it for shareholders. But that proposal did not make . The sale of DBB, according to sources within the federal government needed to shoring up bad bank.

 

The scenario where it was agreed in principle with the nationalization of the bank to sell short or medium term. That's according to a source , "the best scenario for the Belgian state and the taxpayer" .

 

It is possible that the regions - in time - even in the capital of Dexia Bank Belgium steps.

 

The federal government will soon submit its plans for the French. The steering group Dexia led by Hans D'Hondt is then combined with a French delegation. It can not be excluded that the government used emergency law to nationalize DBB. During the meeting also discussed the key for ensuring that Belgium and France to grant the financing needs of the group.

 

Luxembourg

 

Dexia meanwhile reported a brief press release that it will start exclusive negotiations with a group of international investors that the Luxembourg state will participate, with a view to the sale of Dexia Banque Internationale à Luxembourg (Dexia BIL).

 

"The board of directors of the Dexia Group will be on the content of the possible bid to comment after the exclusivity period," the report said.

 

Dismantling

 

The dismantling of Dexia, which was decided last weekend at the highest level, is underway.

 

Time also heard that around the joint venture RBC Dexia Investor Services has discussions underway. Royal Bank of Canada (RBC) and Dexia each own 50 percent of world player of the management of securities funds. RBC has a preemptive right to shares of Dexia.

 

For Dexia Asset Management (Dexia AM) is "very interested," says one well-placed source. Names of interested parties are not known. According to our information, padding the private equity group CVC in recent months the possibility to take over the asset. But it did not go beyond informal contacts.

 

Furthermore, given the rescue of Dexia France shape. In France a new bank in the pipeline for lending to local authorities to secure. The Board of Directors of Banque Postale to BP, which is involved in the construction, gave the green light yesterday for the new setting.

 


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Thu, 10/06/2011 - 06:46 | Link to Comment Fips_OnTheSpot
Fips_OnTheSpot's picture

And E 1bn already "lost" by bankrun - http://www.lesoir.be/actualite/economie/2011-10-06/1-milliard-d-euros-re...

Even municipals (hah!) are getting their cash out of there.

Thu, 10/06/2011 - 10:09 | Link to Comment covert
covert's picture

this is why there should be anarchy, there is too much govt.

http://expose2.wordpress.com

 

Thu, 10/06/2011 - 06:48 | Link to Comment wombats
wombats's picture

What's next?  BofA and JPM to the rescue?

Thu, 10/06/2011 - 07:02 | Link to Comment FubarNation
FubarNation's picture

No what is next is the nationalization of BOFA and JPM.

Thu, 10/06/2011 - 06:49 | Link to Comment Dick Darlington
Dick Darlington's picture

Next up Italy?

11:44 06Oct11 RTRS-SIGNS APPEARING OF CREDIT CRUNCH IN ITALY DUE TO HIGHER BANK  FUNDING COSTS - ITALY BUSINESS GROUP OFFICIAL

Thu, 10/06/2011 - 06:53 | Link to Comment gojam
gojam's picture

"Who will nationalize a governmentless Belgium?"

Well, Germany have tried to nationalise Belgium twice in the last 100 years.............................

Thu, 10/06/2011 - 06:56 | Link to Comment wombats
wombats's picture

It will be a wonderful opportunity for the FED and ECB to print.  Saving whole countries will surely justify an excuse to print billioins or trillions more fiat.  What could be better for western civilization than a good printing party.

Thu, 10/06/2011 - 08:41 | Link to Comment YHC-FTSE
YHC-FTSE's picture

Shhh! Stop giving those criminals ideas! "Saving" Belgium = hyperinflation. Hyperinflation = eating our shoes for lunch (If you don't have PMs). 

What's the superlative of hyper? Whatever it is, that's where we're heading inflation-wise, if they keep this up.

Thu, 10/06/2011 - 07:32 | Link to Comment bania
bania's picture

That's the question of the day.

Thu, 10/06/2011 - 06:54 | Link to Comment Sophist Economicus
Sophist Economicus's picture

If a bank falls in Belgium, does it make a noise?

Thu, 10/06/2011 - 06:58 | Link to Comment El Gordo
El Gordo's picture

I am here today to announce that I am officially not a candidate for President of the United States.  If selected I will not run, and if elected, I will not serve.  Thank you and have a nice day.

Thu, 10/06/2011 - 07:37 | Link to Comment daily bread
daily bread's picture

but please, buy my book

Thu, 10/06/2011 - 07:01 | Link to Comment Coldfire
Coldfire's picture

Good thing prudential regulators are in place to prevent this kind of thing from happening anywhere else but Belgium, France and a few other backwaters that don't even begin to matter.

Thu, 10/06/2011 - 07:05 | Link to Comment campag
campag's picture

and stocks continue to climb - now ignoring all bad news that ZH can provide

 - weak shorts are being carried out.

Thu, 10/06/2011 - 07:04 | Link to Comment Dick Darlington
Dick Darlington's picture

Sounds like a circular jerk to me...

Oct. 6 (Bloomberg) -- Spain will change the rules governing
the industry-funded deposit-guarantee funds to unify them into
one facility that offers a guarantee to the state’s FROB bank-
bailout fund against any losses it suffers in the restructuring
of the industry.
     The sector will bear the whole cost of  the restructuring,
Finance Minister Elena Salgado told reporters today, shielding
the taxpayer and public finances from losses.

Thu, 10/06/2011 - 07:09 | Link to Comment CRB2525
CRB2525's picture

I prefer to think that the Advantage is that shareholders get stuck with the Bad Bank.  The risk of equity investing coming back to bite them.

Thu, 10/06/2011 - 07:14 | Link to Comment goldbu11
goldbu11's picture

Unless it's a totally unfounded ridiculous Liesman rumour the market will not react....

Thu, 10/06/2011 - 07:15 | Link to Comment Chaffinch
Chaffinch's picture

Dexia's account holders will withdraw their funds via ATMs and Internet at midnight... Dexia's Midnight Runners ;)

Thu, 10/06/2011 - 07:21 | Link to Comment Schmuck Raker
Schmuck Raker's picture

You've been itching to use that.

C'mon, admit it. :)

Thu, 10/06/2011 - 10:49 | Link to Comment Chaffinch
Chaffinch's picture

Yeh it's true - I've been itching to use that line...

Thu, 10/06/2011 - 07:20 | Link to Comment edmondantes
edmondantes's picture

Dexia still has €80bn of deposits... it just shows you how stupid most of the population are... if they had any sense they would have withdrawn every last euro....

It is not as if Belgium can print the euros to cover the black hole now can it?

Thu, 10/06/2011 - 07:23 | Link to Comment Schmuck Raker
Schmuck Raker's picture

Correction: E79bn, with withdrawals totaling E1bn in Sept.

Thu, 10/06/2011 - 08:06 | Link to Comment Dick Darlington
Dick Darlington's picture

These Qatari dudes sure have some serious death wish...

Oct. 6 (Bloomberg) -- Qatari Investment Authority, the
country’s sovereign-wealth fund, may be part of a group of
international investors looking to buy the Luxembourg banking
unit of Dexia SA, Les Echos reported, without saying where it
got the information.

Thu, 10/06/2011 - 08:39 | Link to Comment Volaille de Bresse
Volaille de Bresse's picture

"These Qatari dudes sure have some serious death wish..."

 

Good one! And Timmy's lil sister from France (Valérie Pécresse is her name) boasted on SEPT. 14 that "French banks do not need any help". 

 

WHEN are we gonna guillotine these clowns? 

Thu, 10/06/2011 - 08:33 | Link to Comment oogs66
oogs66's picture

why can't a signle politician, reporter, actually look at facts and figure out on back of a cocktail napkin that the plans make no sense?  that the problems are too big to fix that easily?

Thu, 10/06/2011 - 10:58 | Link to Comment Chaffinch
Chaffinch's picture

The politicians haven't got a clue - their main concern is staying in power. They rely on advisers who, tragically, used to work for GS, JPM, etc. Max Keiser describes all these stupid acronyms (EFSF, ECB, IMF etc) all lending each other money as being on some kind of giant pointless möbius strip, but, again tragically, the ever-more-complex so-called 'solutions' they keep coming out with confuse the public and, incredibly, appear to confuse the MSM as well.

Wed, 10/12/2011 - 10:18 | Link to Comment karmete
karmete's picture

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