In the past Dexia has proposed dividing its business, selling corporate shares, creating a toxic bank and fusing some branches with other institutions. The Franco-Belgium lender was one of the first to be bailed out in 2008, because it took short positions in order to finance long ones, mostly for city councils that are bona fide toxic assets.
Despite its capital reserves, this financial structure is not viable with limited liquidity. And the French government will not provide funds that would help protect its AAA rating.
As people watch Greece receive bailout funds that will help the country buy time, Dexia is emphasizing the true underlying problem in Europe: excess debt within the financial sector, which has to be dealt with as soon as possible as lenders recapitalize.