Hypo Real Estate is the second largest lender in Germany. In late September, 2008, the group faced eminent failure, resulting from short-term refinancing. The European Union put together a consortium of banks with a rescue sum of €35 billion on October 2, 2008, to cover loan guarantees until April 2009.Financial Times: Rescue package for Hypo Real Estate approved (October 2, 2008)
The bailout collapsed on October 4, 2008, when private investors withdrew their support because of undisclosed funding issues.*Telegraph: Financial crisis: Hypo Real Estate nears collapse... (October 5, 2008) German chancellor Angela Merkel promised on October 5, 2008, to assist the ailing lender, concerned that the failure would contribute to the expanding European Bank Crisis.MarketWatch: German officials in talks to save Hypo Real Estate (October 5, 2008)
Quotes
We will have to start over again from last weekend's meetings. Hypo Real Estate has to be stabilized otherwise the damage would be unpredictable. -- German Finance Minister Peer SteinbrueckMarketWatch: German officials in talks to save Hypo Real Estate (October 5, 2008)
References
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On Sunday, October 5, German chancellor Angela Merkel promised to guarantee all private savings accounts, a total of some €500 billion (or more than $700 billion)New York Times: Germany Moves to Shore Up Confidence in Economy (October 5, 2008)
