Dexia

If Commerzbank invited dire forecasts of future problems by its expensive new headquarters building, the managers of Belgian-French bank Dexia did even better: they built two new HQ at the same time! The “Tour Dexia” in the La Défense district of Paris (142 meters tall) was opened in 2005 and the “Dexia Tower” in Brussels (today, after Dexia's demise, called the Rogier Tower; at 137 meters, the third tallest building in Belgium) in 2006. In the latter building, its 4,200 windows were, at an unknown cost, equipped with 12 light bulbs each, which show red, green and blue LED light. Together, the 50,400 light bulbs allow various structures to be shown on the façade of the building, for instance the Dexia or the Olympics logo or a multi-colored light show.

From the time the Dexia Tower in Brussels was inaugurated in late 2006, the share price of Dexia on the Brussels exchange fell from a peak of 22.56 to 0.07 euro at the end of 2012 when the bank was broken up, a fall of 99.7 percent. The price of the residual part of the bank in July 2014 was 0.03 euro (after Dexia Banque Belgique was broken up and nationalized).

There is no particular French or Belgian or European story to the development of Dexia, just the story of a bank (or rather two banks) without political, supervisory, owner or management control, going off on an ambitious spending spree, with little relationship to the structure of banking activities in their respective home countries or the interest of their owners. Both its component companies had started as specialized banks, financing local authorities in their respective countries but had succumbed to higher ambitions. The Belgian Gemeentekrediet (Crédit Communal) began the international expansion in 1991 by taking a stake of 25 percent in the Banque Internationale de Luxembourg (BIL), the biggest bank in the duchy, increased to 51 percent the year after. The French Crédit Local took a majority stake in 1995 in the Hypothekenbank Berlin AG (becoming sole owner in 2003). In 1996, the two municipal-finance companies which were already represented in New York, London, Berlin and Vienna merged to become Dexia SA, with listing on the Brussels as well as Paris exchanges. Their important German subsidiary changed names in 2006 to become the (still existing) Dexia Kommunalbank Deutschland.