The stock price of Dexia SA, Belgium's largest bank, fell by more than 20% this week amid market concerns over short-term liquidity, but the impact on the bank's covered bond pool remains limited, according to Standard & Poor's.

Moody’s Investors Service put Dexia’s three main operating units on review for a downgrade earlier this week on the back of concerns that the lender was struggling to fund itself.

Moody's is also concerned that the bank does not  have sufficient collateral at its disposal, “potentially resulting in a further squeeze in its available liquidity reserves.” The bank’s shares are down 59% this year.

In a report S&P stated that Dexia's French covered bond program pool has public sector exposures of about €7.5 billion in Italy, €3.2 billion in Spain, and €0.4 billion in Greece, constituting in total less than 15% of the €77.5 billion cover pool.

S&P rates Spain 'AA/Negative' and Italy 'A/Negative'. Dexia’s German public sector covered bond has an exposure of about 14% to these countries, with a cover pool balance of €37 billion, according to the report.


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