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| Europe |
| Merkel guarantees German savings |
| 2008-10-05 |
| Germany will guarantee all private savings accounts, says Chancellor Angela Merkel, as a major bank struggles to stay in business. Ms Merkel was speaking after an emergency meeting with the central bank and financial regulator. Hypo Real Estate, Germany's second biggest commercial property lender, is in trouble after a 35bn euro ($48bn; £27.2bn) rescue plan collapsed. Hypo has said it will study alternative measures to fund its business. "We will not allow the distress of one financial institute to distress the entire system. For that reason, we are working hard to secure Hypo Real Estate," Ms Merkel said. The BBC's Tristana Moore in Germany says the government is under intense pressure to save the bank before markets reopen on Monday. But out correspondent says tax-payers must also be convinced that a bail-out would be justified. On Saturday, European leaders at a Paris summit stopped short of offering a US-style bank bail-out plan. The collapse of Hypo Real Estate will put further strain on other financial institutions in other countries, struggling against a crisis of confidence in the global financial system. |
| Posted by:john frum |