Belgium Bails Out Failing Dexia
Belgian division to be nationalized; Belgium, France offer guarantees
By Matt Cantor,  Newser User
Posted Oct 10, 2011 9:01 AM CDT
The Dexia logo is seen on the top of a building from the Dexia bank headquarters in Brussels on Monday, Oct. 10, 2011.   (AP Photo/Virginia Mayo)

(Newser) – Leading Franco-Belgian bank Dexia has agreed to a government rescue plan—making it "the biggest euro zone bank failure in quite some time," one analyst tells the New York Times. The plan will nationalize Dexia's Belgian banking division in a $5.4 billion government buyout; meanwhile, Belgium, France, and Luxembourg are providing the bank with $121 billion in guarantees, Reuters reports. Belgium will cover 60.5% of the guarantees, with France providing 36.5% and Luxembourg the rest.

Without access to wholesale funds, Dexia's shares plummeted 42% last week; trading was suspended Thursday until later today. It's not the first time Dexia has needed government help. The news comes as France and Germany promised that plans to protect Europe's banks from a possible Greek default will be ready in time for November's G20 meeting, though neither leader offered details of how such a plan would work.