Dexia rescue ramps up pressure on France amid downgrade fears

Managers fear France could be the next European nation in line for a downgrade as it steps in to support beleaguered bank Dexia.

The EFSF’s AAA-rating is also under threat, even as optimism grows over the eurozone’s ability to resolve its  debt crisis. Another tumultuous week in the markets saw acceptance among policymakers of widespread eurozone bank recapitalisations. Meanwhile, the ECB announced further liquidity measures, raising hopes of a more co-ordinated response to the continent’s sovereign debt crisis. However, those actions were preceded by France and Belgium announcing they would guarantee Dexia Bank’s assets. Shares in the group plunged last week as investors panic sold the stock. Bank of Fra...