Fortis faced a takeover, break-up or nationalization as European Central Bank President Jean-Claude Trichet held emergency talks on Sunday with Dutch and Belgian ministers to restore faith in the Belgian-Dutch financial group.
Trichet, who as ECB head is responsible for safeguarding financial stability in the euro zone, joined Belgian Prime Minister Yves Leterme in Brussels in a bid to secure the future of Fortis, including a partial or full sale or some form of state intervention, a source familiar with the situation said.
BNP Paribas and ING Group both declined comment on reports that they could buy all or part of Fortis or Dutch bank ABN AMRO, which Fortis bought a year ago.
Fortis' board held an emergency meeting on Sunday, a source close to the board said, and new CEO Filip Dierckx then joined Belgian and Dutch ministers and central bankers meeting with Trichet nearby at the Belgian parliament.
A document Dierckx carried into the meeting, photographed by Reuters, listed a range of options including "Fortis to sell stake in ABN AMRO for x billion euros to xx" and "governments of Belgium and Luxembourg to invest xx billion euros in Fortis."
The document also said Fortis Chairman Maurice Lippens, blamed by some shareholders for poor communication over the bank's troubles, would resign.
Luxembourg Budget and Treasury Minister Luc Frieden said in an RTL television interview that the Dutch, Luxembourg and Belgian governments would all buy stakes in the cross-border bank unless a foreign bank buyer emerged.
"I hope we will find a solution to protect savers," Dutch Finance Minister Wouter Bos said on his way into the meeting.
Dutch newspaper Het Financieele Dagblad said ING had withdrawn from talks to take over some or all of Fortis.
The problems at Fortis, whose shares dropped by a third last week on investor concerns about its liquidity and funding, stem from last year's 70 billion euro purchase of ABN with partners Royal Bank of Scotland and Spain's Santander.
A key issue in the future of Fortis was whether the governments or the ECB would provide financial guarantees, a source familiar with the situation said.
Belgian business daily Tijd said nationalization was emerging as the most plausible option with the ECB ready to make available a big credit line to help the Belgian authorities.
At the same time, financial authorities in Belgium and the Netherlands scrambled to prepare reassurances on the integrity of the wider Benelux financial system, officials said.
Belgium's financial regulator, the Banking, Finance and Insurance Commission (CBFA) said an announcement was likely in the evening.
BNP PARIBAS, ING INTERESTED?
Officials from central banks, supervisors and government treasury departments were also converging in Amsterdam on Sunday for a long-scheduled meeting of the Financial Stability Forum (FSF) chaired by Bank of Italy Chairman Mario Draghi, with a news briefing brought forward to Monday from Tuesday.
Fortis has been weighed down by its 24 billion euro outlay for ABN in a market that is neither conducive to more capital increases nor willing to pay for the assets it wants to sell.
As its shares plummeted more than 20 percent to 15-year lows on Friday, Fortis called an emergency news conference to say its position was strong and that it would expand asset sales to as much as 10 billion euros to raise cash.
The stakes are high in Belgium, where Fortis is the biggest private sector employer and more than 1.5 million households, roughly half the country, bank with the group.
Marianne Thyssen, chairwoman of Prime Minister Leterme's Christian Democrats, told Belgian television it was important the public should know their savings were safe.
"The government is ready to guarantee the full 100 percent."
Fortis named Dierckx as chief executive on Friday evening, hastily replacing interim incumbent Herman Verwilst.
In London, regulators were in talks on the future of troubled lender Bradford & Bingley, raising the prospect that a second British bank could be nationalized.
Financial players around the world were hoping that U.S. lawmakers would finally sign off on a deal to create a $700 billion government fund to buy bad debt from ailing banks in a bid to stem a credit crisis threatening the global economy.
(Additional reporting by Antonia Van De Velde, Yves Herman, Marcin Grajewski in Brussels, Michele Sinner in Luxembourg, Steve Slater in London; Writing by Paul Taylor and Reed Stevenson; Editing by Paul Bolding and Alexander Smith)