German officials meet to seek Hypo Real rescue
Officials from the German government, central bank and financial regulator met on Sunday in an effort to save lender Hypo Real Estate (HRXG.DE: Quote, Profile, Research, Stock Buzz) after a Berlin-brokered deal to rescue the imperiled bank unraveled.
HRE is fighting for its life after German banks and insurers on Saturday pulled out of a state-led 35 billion euro ($48.5 billion) rescue program agreed only days earlier.
The banks and insurers were to absorb 8.5 billion euros of the cost while the public sector was to shoulder the rest.
The Finance Ministry on Sunday urged all involved to “show responsibility” and said all possibilities should be considered.
“Everyone has to meet their responsibility, and according to the scale of their responsibility,” ministry spokesman Torsten Albig said (quick payday loan).
Chancellor Angela Merkel, back in Berlin after Saturday’s crisis talks in Paris with her French, British and Italian counterparts, is due to make a statement on the bank’s plight on Sunday afternoon, a government source said.
The news of HRE’s woes was a new blow for the global financial system struggling to cope with an unprecedented crisis of confidence. It also poses a political challenge for Merkel’s ruling coalition, which has come under fire for its handling of the rapidly escalating situation.
Albig said experts from the government, the Bundesbank and regulator BaFin were meeting to assess the situation and would be consulting with the banks and insurers.