Document Type

Case Study

Case Series

Resolution and Restructuring

JEL Codes

G01, G29


Dexia Group (Dexia, or the Group), a banking and insurance conglomerate, was the world’s largest municipal lender in 2008, with major operations in Belgium, France, and Luxembourg. Heavy exposure to the US housing market at the onset of the Global Financial Crisis caused EUR 3.3 billion in losses, and Dexia faced runs from Belgian and Luxembourgish depositors in late September 2008. On September 30, 2008, authorities announced a EUR 6.4 billion (eventually EUR 6 billion) public and quasi-private capital injection for Dexia to remain adequately capitalized amid market distress. The European Commission (EC) approved the Group’s transformation plan on February 26, 2010, which consisted of measures to refocus Dexia’s activities to historical markets, restore liquidity and reduce its risk profile. However, the eurozone crisis of 2011 caused a net loss of EUR 11.6 billion, creating a negative equity situation and forcing authorities to pursue another intervention. The Belgian government nationalized Dexia Bank Belgium on October 10, 2011, for EUR 4 billion, and a Qatari firm and the Luxembourgish government later purchased Dexia Banque Internationale à Luxembourg. The EC approved a resolution plan for Dexia on December 28, 2012, which included a EUR 5.5 billion capital injection from the Belgian and French governments. The Group remains in orderly resolution as of the writing of this case study, while the former Belgian and Luxembourgish subsidiaries operate separately with ownership stakes from their respective governments. Belfius, 100% owned by the Belgian government, is a systemically important financial institution as Belgium’s second-largest retail bank, with an equity book value of EUR 11 billion as of year-end 2022.