French bank may be forced to merge

Franco-Belgian investment bank Dexia could be merged with the state lender Caisses des Dépôts as French banks come under pressure to strengthen their capital bases.

Dexia’s management has been attempting to arrange a deal with Banque Postale, the financial arm of the French postal service. The bank narrowly escaped collapse in the 2008 and needs to dispose of €20 billion of bad debt.