DislikedA German mortgage lender (2nd largest i believe)
has indicated they are in trouble.Ignored
According to Reuters Hypo Real Estate released a statement saying: The 35 billion euro rescue package promised to the Hypo Real Estate Group and extending into 2009 announced last week is currently withdrawn. The intended rescue package involved a liquidity line to be provided by a consortium of several financial institutions. The consortium has now declined to provide the line." Hypo Real Estate spokesman Hans Obermeier said. "We are fighting for the future existence of the company." Sources familiar with the matter told Reuters that the German financial sector had balked at the plan after fresh financing shortfalls had emerged at the weekend. They had then insisted that Berlin take on a greater role in saving the bank.
According to other reports it could mean that Germany will be forced to nationalize the stricken lender, which would wipe out a 1.1 BLN EUR investment made by JC Flowers.
The Hypo news will provide an immediate test to the pledge made on Saturday by leaders from the biggest EU countries that they will ensure that no major European financial institution will be allowed to fail. The news also come fresh on the heels of the passing of the 700 BLN USD Treasury bailout package that was designed to get the credit markets operating properly again. It doesn"t sound like the week is going to start out on a happy note. -- [email protected]