Fortis Partially Nationalized #banking

Yesterday Fortis was partially nationalized by the Netherlands, Belgium and Luxembourg.

Fortis was partially nationalized on September 28, 2008, with Belgium, the Netherlands and Luxembourg investing a total of 11.2 billion euros (16.3 billion U.S. dollars) in the bank. Belgium will purchase 49% of Fortis's Belgian banking division, with the Netherlands doing the same for the Dutch banking division. Luxembourg has agreed to a loan convertible into a 49% share of Fortis's Luxembourg banking division.¹

Having just bought ABN-AMRO, it will be put back on the market. I can't say I expected this to happen, but as a classic case of over extending it shows that the financial crisis is hitting mainland Europe hard. Apparently Basel II wasn't as effective in separating the operational risk from credit risk.

Technorati Tags: risk, banking