Shares in Dexia bank plunge amid collapse rumours

Shares in Franco-Belgian bank Dexia have fallen more than 37% in early trade this morning amid concerns a collapse or break-up is on the cards.

Both governments have said they will step in if necessary to bail out Dexia.

It will be the second bailout for the institution which needed intervention in 2008 after the US mortgage market crashed.

Market analysts say it is in danger of becoming the first major European banking institution to fall since the sovereign debt crisis began last year.

French banks have been badly hit by the debt crisis in Greece.

Ratings agencies have marked them down for having over-invested in risky Greek bonds