Sarkozy set to meet bankers as French shares plunge

Tuesday, 30 September 2008, 07:00 Hrs
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Paris: French President Nicolas Sarkozy was to meet with the heads of French banks and insurance companies later Tuesday, as French shares tumbled for a second consecutive day in the wake of the refusal of the US Congress to approve a finance bail-out.

The aim of the meeting at the Elysee Palace is to "review the situation of the financial institutions as well as the availability of credit to households and companies," Sarkozy's office said, but the defeat in the House of Representatives of the plan to rescue the US finance sector will add urgency to the talks.

Last week, Sarkozy had vowed that the French state would come to the aid of any financial institution at risk of failing, to ensure that depositors did not lose any of their savings.

Late Monday, the governments of France, Belgium and Luxembourg agreed in principle to inject 6.4 billion euros ($9.2 billion) into the struggling Franco-Belgian financial services group Dexia.

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

Dexia's share price fell by 28.50 percent on the Paris Bourse Monday, to 7.20 euros, its lowest-ever level. Trading in Dexia shares was suspended Tuesday as stocks on the Paris Bourse fell for a second straight day.

The Bourse's blue-chip CAC 40 plunged by nearly 3 percent shortly after opening before staging a mild recovery to stand at 3,892.50, down 1.54 percent on the day.

Declining issues were led by insurance giant Axa, down 5.15 percent to 20,44 euros. French banks BNP Paribas and Credit Agricole lost nearly 4 percent each, to 63.00 and 12.50 euros, respectively.
Source: IANS
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