Hypo Real recieves €50 billion bailout

The German government, along with Deutsche Bundesbank, financial regulator BaFin and a number of German banking and insurance representatives, has agreed on a €50 billion rescue package for property lender Hypo Real Estate after an earlier bailout attempt collapsed last week over the weekend.

Under the terms of the deal, which were settled in talks yesterday, the government will contribute €20 billion of liquidity, while the finance sector will double the €15 billion promised previously.

On September 29, the bank said it had agreed a €35 billion liquidity package. However, on Saturday banks and insurers withdrew their support, prompting last minute efforts to broker a deal before trading opened today.

Under the terms of the original deal, Hypo Real Estate was to write down its holding in Dublin-based subsidiary Depfa Bank, which was acquired in October 2007. The chief executive of Depfa, Paul Leatherdale, and Bo Heide-Ottosen, the company's head of long-term funding and treasury, both resigned with immediate effect on September 29.

See also: BNP to liquidate Fortis' €10.4 billion toxic assets
Bailouts fail to lift markets

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