Dexia will receive 6.4 billion euros or $9.2 billion from the governments of France, Belgium and Luxembourg in order to avoid a financial collapse. This will make Dexia the second Belgian bank within a week to get a government and shareholder bail out following the crisis in banking sector which has now spread from the US to European markets.

Dexia is a French-Belgian lender which mainly provided loans to local governments in Europe. But the recent market meltdown in US left it with huge losses and on Monday, Dexia closed almost 30% lower on the stock market. This led to emergency negotiations between the bank and a consortium of European government officials. The CEO of Dexia, Alex Miller resigned immediately after the closing of talks and clarified that asking for state help was the only viable option left with Dexia to help it stay afloat.

The tri-government bail out of Dexia comes only two days after another Belgian-Dutch bank Fortis was pulled back from the brink by a rescue package of 11.2 billion euros or $16.4 billion by the governments of Belgium, Netherlands and Luxembourg. The near-collapse of so many finance firms in Europe is being seen as the direct consequence of the US market meltdown in which several major investment banks of Wall Street either went bankrupt or required external help to survive.