The directors of Dexia also trotted out fear of contagion across the eurozone's banking system as justification for a fourth, fifth and possibly more future bailout.
The directors of Dexia have warned that shutting down the Franco-Belgian lender too quickly could endanger the European financial system.
In a message to shareholders, Dexia’s board said that forcing the bank to rapidly sell off assets could crystalise losses it cannot afford to take.
Dexia said that if this were to happen it would likely default on its debt, which it said could cause a new European banking crisis.
“Such a default would jeopardise the stability of the whole European financial system. Indeed, a default of the Dexia group would lead to assets being frozen in the short term and would affect the liquidity of the markets, with a significant risk of a spill-over effect to the rest of the eurozone, given the size of the group’s balance sheet,” said the bank.
The warning came after Dexia this month received its third state bail-out in four years, taking the total amount of money spent rescuing the bank to nearly €15bn (£12bn).....
However, the new warning about the impact its failure could have on the wider European financial system is based on its large holdings of assets, including sovereign debt, which, if sold off en masse, could lead to a sharp fall in asset prices.