Bosses resign as Dexia falls prey to credit crunch

By SiliconIndia   |   Tuesday, 30 September 2008, 07:00 Hrs
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Brussels/Paris:The bosses of Dexia stepped down Tuesday after the struggling Franco-Belgian bank became the latest victim of the global credit crunch and was bailed out by three European governments.

In a statement, Dexia said it had accepted the resignations of Axel Miller, a Belgian who acted as its chief executive officer, and Pierre Richard, a Frenchman who chaired its board of directors.

The two were asked to "continue to look after the daily management until their successors have been appointed", the statement said.

Both managers had tendered their resignation in the wake of the 6.4-billion-euro ($9.2 billion) emergency capital injection from the governments of Belgium, France and Luxembourg.

"All the necessary measures will be taken to preserve the interests of Dexia's depositors," Belgian Prime Minister Yves Leterme said.

Trading in Dexia was suspended briefly on the Paris and Brussels stock exchanges Tuesday morning after its shares had plummeted by nearly 30 percent Monday to 7.20 euros, its lowest-ever level.

Shares recovered at the resumption of trading and were up more than 10 percent by Tuesday afternoon.

The Dexia bail-out came just hours after the governments of the Netherlands, Belgium and Luxembourg agreed to partly nationalise Fortis by supplying the Dutch-Belgian banking giant with a total of 11.2 billion euros.

Dexia was created in 1996 from the alliance of Credit Communal de Belgique and Credit Local de France - one of the first cross-border mergers in the European banking sector.

Its retail bank has 5.5 million customers in Belgium, Luxembourg, Slovakia and Turkey.

The European Commission gave its initial blessing to the Dexia bail-out but warned that it would keep an eye out for any sign of illegal state aid being involved in the operation.

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