BRUSSELS, September 28, 2008 (AFP) – The Belgian, Dutch and Luxembourg governments agreed Sunday to partially nationalise Fortis in a 11.2 billion euro bailout to keep it from becoming the latest victim of the US-born financial crisis.
Top officials from the three countries and the European Central Bank hastily hammered out a rescue over the weekend after the banking and insurance group failed to dispel liquidity concerns in recent days.
“The important thing is that it’s a Benelux agreement. The governments are directly intervening to take control of the three banks in the three countries,” Belgian Finance Minister Didier Reynders told a press conference.
“We said that we would not leave any client by the wayside,” he said.
Fortis saw nearly a quarter of its value on the stock market wiped out over the last week as it battled to dispel repeated concerns about its liquidity, insisting as recently as Friday that it had ample funding.
Despite such assurances, Fortis shares plummeted more than 20 percent on Friday alone, and that was before the surprise announcement that chief executive Herman Verwilst was stepping down.
Under the hastily arranged rescue, Belgium will make the biggest contribution, taking a 49