Plan for Dexia rescue fund is taking shape

CUSTOMERS pulled millions of euros from troubled Dexia yesterday but the Franco-Belgian bank avoided a full-scale run on deposits as a bailout appeared imminent.

Belgian customers withdrew around €300m (£258.88bn) from Dexia accounts, excluding online transactions. The Belgian arm of the bank holds €80bn in deposits.

An emergency package is set to be announced today after political leaders in both France and Belgium repeated pledged Dexia would be saved.

A rescue could see the Belgian arm nationalised and the French municipal funding arm broken off and combined with French state bank Caisse des Depots and Banque Postale, the banking arm of France’s post office.

Yves Leterme, Belgium’s caretaker prime minister, said nationalisation of the banking activities, including a large retail operation, was under consideration. He also said the planned guarantees did not pose a risk for his country and that impact of nationalisation would be “quite limited”.

Dexia needs a bailout, three years after it received €6.4bn from the governments of Belgium, France and Luxembourg, because of its exposure to Greek debt and trouble accessing wholesale funds.