October 5, 2011
As European officials brace for the potential of a Greek debt default, Chancellor Angela Merkel of Germany said Wednesday that she would push for more capital to protect her nation’s banks. And European banking regulators were trying to identify the region’s most vulnerable financial institutions.
Mrs. Merkel’s comments, after meetings with the European Commission here, came amid reports that customers were withdrawing savings from the French-Belgian financial institution Dexia, which is about to receive its second rescue in three years.
Shares of the bank, which is weighed down by its exposure to Greek debt, have plunged since Greece acknowledged over the weekend that it would miss the financial goals set as a condition for its receiving its next round of European bailout money.
The speed of that chain reaction has prompted the European Banking Authority to review the results of the bank stress tests conducted in July — this time to measure the effect of the even lower value of the bonds of Greece and some other governments held by banks in countries using the euro currency.
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