Malaysia Property News is a free resource website sharing Daily Property News & information about Property in Malaysia, which related to, Property Market, Property Investment, Commercial Property , Hot Properties Malaysia, Real Estate, Retail Shop, Business Park, Condominium Malaysia, Terraces & Apartment Malaysia, Houses, Residence, Resort and many more.

Monday, October 6, 2008

Germany races to save property lender Hypo

BERLIN: Germany announced yesterday that it would guaranteed all private savings accounts, joining Ireland and Greece in taking drastic independent action to head off financial crisis.

The announcement came as business leaders and lawmakers met in the capital for feverish talks to keep an embattled real-estate giant afloat.

Hypo Real Estate AG had been planning on a 35 billion (1 = RM4.81) bailout package financed by the government and private banks, but the deal fell apart on Saturday evening.

Chancellor Angela Merkel vowed that she would not let the failure of any company disrupt Europe's biggest economy.

"We will not allow the distress of one financial institution to distress the entire system," she told reporters while talks between government and business leaders continued in the capital.

"For that reason, we are working hard to secure Hypo Real Estate."

Merkel said the plan would ensure that anyone who made reckless market decisions would be made to answer for their actions.

"The federal government will make sure of that," she said. "That is our debt to the taxpayers."

The talks at the Finance Ministry came a day after a 35 billion rescue plan for the blue-chip company that was approved by the European Union on Thursday unravelled at the seams.

Finance Minister Peer Steinbrueck, who spoke at the press conference with Merkel, said the government was working on an "institute-specific solution" to Hypo's near-bankruptcy.

"We have to start again where, at the end of last week, we thought we had a solution," he said.

"I am pretty angry that the management of (Hypo) in the last few days has revealed a further liquidity hole of unknown size," Steinbrueck said.

"The federal government refuses to be forced into some sort of shared responsibility by this bank or to put the entire burden of the risks on taxpayers."

Hypo, the country's No. 2 commercial property lender, said on Saturday that the rescue plan had fallen apart after private lenders withdrew support, a key element to the proposal that had already been approved by the EU earlier last week.

Hypo is relatively small when compared with other firms in Frankfurt's blue-chip DAX index of leading companies, but its role as a lender for commercial property, infrastructure and government financing makes it a major financial player.

By Agencies

No comments: