Germany Bails Out Hypo Real Estate

October 6th, 2008 By: Michael van der Galien | Tags:
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On Sunday morning, Hypo Real Estate - a large German mortgage lender - said it was in danger of total collapse after a bank consortium withdrew from negotiations, led by the German government, to bail Hypo out. Sunday evening, however, marked yet another change: the German government asked banks to come back to the negotiating table and, in the end, a deal was agreed upon.

The banks and German government will invest 50 billion euro ($69 billion) in Hypo.

That is 15 billion more than originally planned.

The German government will spend approximately 27 billion euro. Private banks will fund the remainder as a line of credit.

Earlier Chancellor Angela Merkel said her government guaranteed all private savings accounts, even though she criticized Ireland for doing the same only days before.

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