Dexia: A sleazy bank aiding Israeli settlers

The area around Rogier Tower, former home of Dexia.

David Monniaux Wikimedia Commons

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.

“Laughable”

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.

Deceptive

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.

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Comments

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This article contains so many factual errors that it completely loses its creditbility :

  1. There is no “international law” that forbids investing in the “disputed territories”, and hopefully so as a number of arab cities would find themselves without funding from Dexia.
  2. None of the legal attack on Dexia has been successful so far even if around 60 are still pending, they all appear as the temptation to evade obligations from municipalities would tendered offers to pay little at first and more after the next election.
  3. Dexia headquarter is not tour Rogier anymore, but it is on 2 floors of the much smaller tour Bastion.
  4. And finally, Dexia Israel remains as the only profitable entity of the former Dexia group, thus reducing the burden on Belgian taxpayers.

Altogether, this article is a shame.

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Your third point is clearly invalid: it states already in the first paragraph 'until recently' as well as under the photo.
That's typical hasbara: finding a detail to manipulate in order to hide the bigger picture.
Maybe Mr Latour ['the tower' in French] is actually a hasbarista working from the second floor of the Tour Bastion.

David Cronin's picture

I think Mr Latour should familiarize himself with the International Court of Justice’s ruling on Israel’s wall in the West Bank. If he bothered reading it, he might learn that — under international law — no assistance can be provided to Israel’s illegal activities.  It’s interesting that Mr Latour has used the phrase “disputed territories.” Dexia representatives have also used this phrase in trying to fob off Palestine solidarity campaigners. Are you — or were you — on Dexia’s payroll, Mr Latour? You seem to have a much better knowledge of the bank’s spin than of international law. 

David Cronin

David Cronin's picture

David Cronin is an associate editor of The Electronic Intifada. His latest book is Corporate Europe: How Big Business Sets Policies on Food, Climate and War (Pluto, 2013). His earlier book is Europe’s Alliance With Israel: Aiding the Occupation (Pluto, 2011).