Shares of Dexia, the large French-Belgian bank, collapsed in recent days. Banking woes prompted a broad market sell-off in Europe on Tuesday, Dealbook’s Landon Thomas Jr writes. Europe’s biggest banks may finally be forced to own up to their losses.
While bank executives and government leaders have been reluctant to acknowledge that the hundreds of billions of euros of Greek debt held by financial institutions is worth far less than its face value, they are slowly accepting the grim reality, as investors, clients and lenders grow increasingly wary.
On Tuesday, Deutsche Bank said it would not meet its profit goals for the year, citing investor uncertainty and losses on Greek bond holdings. Government officials are debating dismantling Dexia, the large French-Belgian bank, and warehousing its troubled assets in a bad bank.
The latest woes prompted a broad market sell-off in Europe, hitting banks in France and Germany particularly hard. Wall Street, dragged down early by the problems on the Continent, lifted at the close, after reports that European financial officials were considering ways to shore up the industry.
As Europe’s debt crisis continues to fester, financial firms exposed to troubled sovereign debt face a brutal fallout…
Read more at http://dealbook.nytimes.com/2011/10/04/banks-in-europe-face-huge-losses-from-greece/?ref=business
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