France and Belgium will "step in" if needed to save the troubled Dexia bank, the Belgian finance minister said Tuesday, amid fears of collapsing dominos throughout Europe's ailing banking system. The Franco-Belgian bank, already bailed out when the US mortgage market crashed in late 2008, is in danger of becoming the first major European banking institution to fall since the sovereign debt crisis began last year after emergency boardroom talks. The French and Belgian governments will "step in if necessary" to bail out Dexia once more, Belgium's finance minister Didier Reynders said Tuesday, as banking sources claimed a break-up is on the cards. Reynders discussed the bank's problems during a meeting with French counterpart Francois Baroin on the margins of eurozone talks in Luxembourg. Eurogroup head Jean-Claude Juncker, who also attended the talks, delivered more bad news for the sector by suggesting that banks and other private sector creditors will have to accept larger losses as part of a second bailout plan for indebted Greece. Luxembourg Prime Minister Juncker, chairman of eurozone finance ministers group, warned that private creditors, banks and investments funds could suffer a more severe hit on their investments in Greek sovereign bonds than the 21 percent loss agreed in principle in July. "These are technical revisions we are discussing," he told reporters. "As far as PSI (Private sector involvement) is concerned, we have to take into account that we have experienced changes since the decision we have taken on July 21," he stressed. Last week the Financial Times revealed that seven of the 17 eurozone nations were already pushing for a greater contribution from private creditors, with Germany and the Netherlands leading the call. Dexia bank's shares lost more than 10 percent on Monday on warnings of an imminent credit rating downgrade and wider fears of bank exposure to eurozone sovereign debt. Dexia is heavily locked into long-term financing deals with French local authorities, and deals in this area could be the first part of the bank's operations to be hived off, banking sources told AFP. The two finance ministers held their direct talks amid rising concern among eurozone counterparts at the knock-on effects for an under-capitalised banking system if Greece defaults and other sovereign debt risks emerge amid a sharpening economic downturn. British Chancellor of the Exchequer George Osborne, who flies in to join a second day of talks gathering the full 27-state European Union early on Tuesday, warned Monday that the eurozone had to re-capitalise its banks as part of a multi-faceted solution to the Greek crisis. French banks have been hit especially hard as ratings agencies have marked them down for having over-invested in risky Greek and other weak eurozone sovereign bonds. Generally, all banks have increasingly been restricted to short-term funding sources on markets in recent weeks, further pushing up the cost of maintaining their liquidity, Moody's noted on Monday. Fellow ratings agency Fitch also highlighted "structural weaknesses" with Dexia last week, warning of increasingly difficult access to financing. Reynders insisted that savers' desposits are secure, adding: "The French and Belgian governments are behind their banks, whether it's Dexia or another one." Since early 2010, the bank has been undergoing heavy restructuring ordered by the European Union's competition watchdogs. Dexia chairman Jean-Luc Dehaene, a former Belgian prime minister and senior UEFA adviser, last week denied any plans to break up the group. AlphaValue analyst Christophe Nijdam however said such an approach "could be interpreted as a positive sign" by the ratings agencies.