DEXIA PROBLEMS CONTINUE TO MOUNT AS GREEK TRAGEDY PERSISTS - Attention continues to focus on Greece and market reaction to the euro zone finance ministers move to postpone a decision on providing the country with a new bail-out loan last night. Developments are being watched carefully by many people, not least the board of Dexia bank which held an emergency meeting last night after its share price fell 10% yesterday on the back of an indication from ratings agency Moody's that it was considering downgrading it. Dexia was one of the first European banks to be bailed out in 2008.
Charles Forrelle, from the Wall Street Journal, is in Luxembourg at the meeting of EU Finance Ministers. Mr Forrelle says that Dexia has one of the largest exposures to Greece among overseas lenders and this problem is compounded by the fact that it has a small deposit base. He says it was a fragile bank to begin with and now it has to figure out how to continue to fund itself on the wholesale markets despite its low deposit base. The board of the bank held an emergency meeting last night, where it explored options to break up the bank and Mr Forrelle says that plans to this end should be finalised pretty soon. Other options being looked at included bank guarantees, he added.
Mr Forrelle says that Dexia's problems are closely linked to the situation in Greece and the fact that euro zone finance ministers postponed a decision on providing the next tranche of bail-out money last night will not help its case. He says that markets are falling due to broader fears sparked by the Dexia situation while they remain very concerned about the Greek debt crisis.
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MORNING BRIEFS - Apple looks set to unveil a new iPhone today 15 months after the iPhone four was introduced. The company is hoping to fend off Google's Android and safeguard its lead with the fifth incarnation of the device.
*** Exchequer returns will be published this afternoon and they will include a number of interesting statistics worth watching out for. It is expected the figures will include the amount of money collected as a result of the pension fund levy introduced earlier this year to fund the Government's jobs initiative.
*** On the currency markets the euro is trading at $1.3200 cents and 85.51 pence sterling.
