Germany does not guarantee savings accounts

David Benyon
06 Oct 2008

Tweet
Facebook
LinkedIn
Save this article
Send to
Print this page

Risk management

BERLIN – After a weekend of press speculation and rumour, it appears Germany will not guarantee all private savings accounts. Chancellor Merkel’s comments that German investors would not lose were not a committal to formal guarantees, according to the BBC website.

Speculation of a guarantee, which would have been worth around €500 billion (£390 billion), followed schemes by Ireland, Greece and Denmark. It prompted a UK Treasury plea for confirmation over the weekend, and placed pressure on UK prime minister Gordon Brown to follow suit. German regulator Bafin has described media reports as “misleading”.

German chancellor Angela Merkel and finance minister Peer Steinbrück announced the success of plans to rescue German lending bank Hypo Real Estate in Berlin on Sunday. The state-led bail-out has cost €50 billion of mostly government money. The deal was pushed through by the German government after the first rescue attempt faltered when German banks rejected the deal. Steinbrück said Hypo – Germany’s fourth largest bank – was too big to fail.

In a statement on Bafin’s website, the regulator said: “The risk-shielding strategy, which was agreed last weekend by the German financial sector in consultation with Bafin and the Bundesbank, has the objective of enabling the HRE [Hypo Real Estate] Group to eliminate its liquidity difficulties and re-size its risk positions.”

Tweet
Facebook
LinkedIn
Save this article
Send to
Print this page

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to print this content. Please contact [email protected] to find out more.

You are currently unable to copy this content. Please contact [email protected] to find out more.

You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/

If you would like to purchase additional rights please email [email protected]

You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/

If you would like to purchase additional rights please email [email protected]

You are currently on corporate access.