The European Commission said on Monday (10 October) that Dexia bank rescue not only ensures the stability of the banking group, but the "entire financial system."

Commission will apply the usual criteria - verification and long-term viability of the remaining activities on the market, ensuring that the restructuring burden is shared equally and that all necessary measures have been taken to ensure the right level of competition, announced on Monday ( October 10) EC.
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"Any change or restructuring or new action plan agreed by the aid must first pass through the viewfinder of the Commission," EC said today.

This marked the urgency of saving the Dexia group, "This step ensures the stability of financial system".

Dexia, the first European bank debt crisis seriously affected the euro area, last week urged state support, while its shares fell by 42%.

Franco-Belgian bank's management announced today that it has accepted the rescue plan proposed by France, Belgium and Luxembourg to buy four billion euros (5.4 billion doalari), the Belgian subsidiary of the bank, which has 6,000 employees and deposits totaling 80 billion euros to four million customers.

Dexia bank rescue package requires a state guarantee scheme of up to 90 billion necessary to ensure loans for the next ten years. Belgium will pay 4 billion euros to cover 61% of these guarantees, while France will provide 37% and 3% Luxembourg.

Dexia is not an isolated problem

Dexia is already monitored by the European Commission after it was approved for a loan - or state aid - to 6 billion euros in 2008/2009. This restructuring took only three months after the EU passed the stress test, which does not take into account the banks' exposure to sovereign debt.

"Dexia is not an isolated problem," said Cor Kluis, an analyst for Rabobank International in Utrecht, the Netherlands, quoted by Bloomberg news agency. "The question for all investors in Europe is as politicians will do this and what they want to see is a coordinated and professional solution. This would be a good opportunity for them to restore calm."

"Saving Dexia has become critical to prevent contagion in the banking sector in this region. Dexia bank balance, with total assets of around 518 billion euros in late June, the Greek equivalent of the entire banking system and greater than all the combined assets of financial institutions Irish saved in the last 2 ½ years, "writes Bloomberg.

France rating is not affected

The participation of France in the Franco-Belgian bank Dexia rescue has no impact, for now, the country's AAA credit rating. Rating outlook is stable, said on Monday (10 October)'s Investors Service credit rating agency Moody's said.

"For now there is no impact and we have a stable outlook," said Moody's analyst Alexander Kockerbeck, told Reuters.