Article published on the 2008-10-06 Latest update 2008-12-12 14:58 TU
The Hypo Real Estate deal is the biggest in German banking history. German Finance Minister Peer Steinbrueck said on Monday that he would not rule out a further increase in the state guarantee to HRE, which is Germany's fourth-biggest bank.
Steinbrueck attacked the bank's bosses, saying it would be "inconceivable to be able to continue working with the present management" of HRE, while Chancellor Angela Merkel added that "those who managed their company in an irresponsible way will have to answer for it".
European stocks toppled in reaction to the ongoing crisis on Monday morning. London's FTSE 100 showed a loss of 3.97 percent, Frankfurt's DAX 30 was down 4.33 percent and the Paris Cac-40 was suffering a slump of 4.25 percent.Merkel also reassured savers that their deposits were safe, saying, "We tell all savings account holders that your deposits are safe. The federal government assures it." Denmark gave similar reassurances to bank customers soon afterwards, increasing pressure on other Eurozone governments to make similar guarantees.Meanwhile, French bank BNP Paribas bought out 75 per cent of Fortis bank in Belgium and Luxembourg, for 14.7 billion euros. The Belgian state has in turn bought a majority share of the French banking giant.
2008-12-12 14:49 TU