German finance ministry signs 50bn rescue deal to save one of country’s biggest banks

To save one of Germany’s biggest banks, the finance ministry of the country has agreed a 50bn euro rescue deal.

This deal to save Hypo Real Estate Bank is worth 15m euros and it’s more than the first rescue attempt that broke on Saturday.

Earlier this week, an unlimited guarantee for all private savings was announced by Germany and later Denmark also follwed the suit.

The moves proved somewhat helpful to Asian markets, where Tokyo’s Nikkei index fell 3.6 %. Similarly, South Korean currency fell around 5%.

The other finical institutions are already struggling against a crisis of confidence in the global financial system and the problems of the German Bank will put further strain on them.On Sunday night, French BNP Paribas confirmed that it had agreed to buy 75% holdings of the Fortis financial group that belonged to Belgium and Luxembourg.

In return, the governments of Belgium and Luxembourg will take some stake in BNP Paribas. The Netherlands government has already nationalized the Dutch arm of Fortis.

According to German finance ministry, the move has been taken to stop Hypo Real Estate’s fall in order to prevent a huge damage to Germany and other financial services providers in Europe.

German Chancellor Angela Merkel stated that mangers of the financial institutions would be accountable for their irresponsible attitude. She reassured German savers that all their deposits would be safe.