The 137-meter-tall building Rogier Tower in Brussels was home to the bank Dexia until recently.
Since 2009, representatives of Dexia have repeatedly promised not to issue loans for work undertaken by Israeli settlers in the occupied West Bank. The promises have been broken.
Intal, a Belgian campaign group, has documented how Dexia has kept on financing the theft of Palestinian land. In November last year, for example, the bank went guarantor along with the Israeli defense ministry for a project in the settlement of Kedumim. The previous year Dexia agreed to provide another settlement, Ariel, with a loan of 2.5 million shekels ($700,000).
Many of the empty pledges have been made directly by Jean-Luc Dehaene, the former Belgian prime minister, who served as Dexia’s chairperson from 2008 until 2012. Responding to a barrage of questions by shareholders at the bank’s annual meetings, Dehaene has claimed that its subsidiary Dexia Israel was not part of the parent bank’s “core business.”
A new book Dexia: Une Banque Toxique (Dexia: A Toxic Bank) traces how Dexia’s one-time chief executive Pierre Richard set an objective in 1997 of becoming the world leader for financing local authorities within five years. Dexia Israel was formed as part of that game-plan in 2001.
Written by Nicolas Cori and Catherine Le Gall, the book examines the role played by Dexia in creating a financial crisis for French public bodies. Administrators of services vital to the welfare state — including hospitals and housing — were sold a range of derivatives and other exotic “products” by Dexia, without the inherent risks being explained to them.
The authors don’t flinch in calling out some Dexia bigwigs as liars. In his testimony to a French parliamentary enquiry during 2011, Pierre Richard had the audacity to argue that Dexia’s predatory activities were merely a response to demands from local authorities hoping to “benefit” from the liberalization of the financial markets that began in the 1980s.
This claim was “especially laughable,” according to the authors, considering that there was little knowledge of how modern finance worked among local authorities.
Some of Dexia’s “products” were deceptively named. One type of loans was called Tofix. As that name strongly resembled the French words taux fixe, it conveyed the impression that it was based on a fixed rate of interest. In reality, the contracts involved varying interest rates.
Gérard Bayol, a former director-general of the bank, swore to the parliamentary enquiry that Dexia reserved its most complex loans for authorities with a population catchment area of more than 10,000. A few weeks before he told this fib, a mayor of Trégastel (population: 2,400) handed documents to the enquiry which proved the exact opposite.
Dexia’s gambling debts are being paid by hard-pressed taxpayers. To date, it has been rescued three times by France, Belgium and Luxembourg. The aid has included a €90 billion ($119.3 billion) package in funding guarantees.
As a minimum, the three states should have insisted that Dexia ceases to assist Israel’s violations of international law. So far they have refused to do so. Dehaene, now a member of the European Parliament, has faced no consequences for making promises he had no intention of keeping.
Whereas Rogier Tower sits beside a ramshackle district, the façade of Dexia’s then headquarters has been frequently illuminated by a multi-colored display over the past few years. This stab at sophistication can’t conceal the amoral nature of the bank’s activities.