Inquiry call amid Dexia asset sales

BELGIAN politicians have demanded an investigation after documents emerged showing crippled bank Dexia was warned last year over its “fragility”.

The Green Party called for a parliamentary inquiry after letters emerged showing Autorité de contrôle prudentiel (ACP), the French regulator, wrote to French arm Dexia Crédit Local (DCL) in August and September last year to outline concerns over a shortage of liquidity in US dollars and the way it valued derivatives and risk levels.

Yesterday Pierre Mariani, Dexia’s chief executive, said the ACP had not applied sanctions, while moves to break up the bank gathered pace.

The board approved the nationalisation of Dexia’s Belgian banking business and details of the sale of its French public financing arm.

Dexia said French state bank Caisse des Dépôts and France’s post office bank would take stakes of 65 per cent and five per cent respectively in its public financing arm, Dexia Municipal Agency for a takeover price of €380m (£331.58m). Turkey’s DenizBank may be sold to Qatar.