PARIS: Dexia, a French-Belgian lender, received a capital injection of more than $9 billion from public shareholders on Tuesday as a deepening global credit crisis continued to shake European banks. Meanwhile in Ireland, the government backed all deposits in the country's banks.

After all-night negotiations, the Belgian government announced that it and other Belgian stakeholders would invest $4.26 billion in Dexia. The French government will contribute $1.42 billion, the French state-controlled Caisse des Depots $2.84 billion and the Luxembourg government $518.82 million, according to a statement from the Belgian prime minister's office.

Shares in Dexia, which had been suspended at the open, vaulted 18.1 percent to €8.45 in late morning trading.

"The market is encouraged, this restores confidence" said Georg Krijgh, an analyst at Rabo Securities in Amsterdam. "It shows the government is supporting the banks and makes Dexia one of most solvent in the region, with Fortis and KBC."