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French and Belgian governments have reached an agreement on how to deal with the failing, Brussels-based bank Dexia, according to a Bloomberg report.The bank’s board is meeting right now in Brussels to discuss the solution, which will likely split up the bank.
While the details of the plan have not yet become public, the bank’s troubled assets will likely become part of a “bad bank” while their municipal lending units could be absorbed by instruments of the French and Belgian governments.
France and Belgium have promised that depositors will lose no money. The bank’s balance sheet is comparable to the size of the entire Greek banking system.
The Boston Globe reports that the board will likely make an announcement on the solution tonight or tomorrow.