Dexia Hasn’t Tapped ECB for Dollars in ‘Long Time,’ Coene Says

Dexia SA (DEXB), Belgium’s biggest bank by assets, is “not in trouble,” and has not sought dollars from the European Central Bank in a “long time,” Luc Coene, the country’s central bank governor said.

“When the financing markets become more tight, it clearly puts pressure on them, but it does not mean that there are problems,” Coene said in an interview in Washington late yesterday. “It has, of course, a huge Belgian presence -- we follow it very closely.”

Dexia, which was bailed out in 2008, posted its largest quarterly loss last month because of provisions to sell assets and a writedown of Greek debt, bringing shareholder equity to a two-year low. The bank said Aug. 4 its borrowings from the European Central Bank had doubled to about 34 billion euros ($46 billion), and that it swapped a large part of those funds into the U.S. currency to safeguard dollar funding.

“They have solved their dollar financing problems clearly,” said Coene, who also sits on the ECB’s governing council.

Paris- and Brussels-based Dexia took a 377 million-euro pretax writedown on Greek government bonds in the second quarter after signing the Institute of International Finance’s proposal for a bond exchange and buyback program.

Chief Executive Officer Pierre Mariani said last week that the bank could handle an additional Greek debt writedown of about 1.5 billion euros. Any additional provisions will depend on the outcome of the Greek bailout package agreed to on July 21, Mariani said.

“I have said few weeks ago that some of our banks are still vulnerable and certainly under difficult circumstance and this makes life for them not easy, but there is no reason for concern they can continue to operate without any major problems,” Coene said.

Dexia fell 11 percent to 1.28 euros in Brussels trading yesterday.

To contact the reporters on this story: Meera Louis in Washington at; Gabi Thesing in Washington

To contact the editors responsible for this story: Lawrence Roberts at; Craig Stirling at

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