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| Germany seeks to reassure savers | Germany seeks to reassure savers |
| (about 1 hour later) | |
| German Chancellor Angela Merkel has moved to reassure savers in German financial institutions that their deposits are safe. | German Chancellor Angela Merkel has moved to reassure savers in German financial institutions that their deposits are safe. |
| The step came as one of Germany's biggest lenders, Hypo Real Estate, struggled to stay afloat. | The step came as one of Germany's biggest lenders, Hypo Real Estate, struggled to stay afloat. |
| But BBC business editor Robert Peston says it is unclear if this is a 100% government guarantee of all savings deposits. | But BBC business editor Robert Peston says it is unclear if this is a 100% government guarantee of all savings deposits. |
| Ms Merkel also said she would pull out all the stops to save Hypo Real Estate. | Ms Merkel also said she would pull out all the stops to save Hypo Real Estate. |
| The bank is in trouble after a 35bn euro ($48bn; £27bn) rescue plan collapsed. | The bank is in trouble after a 35bn euro ($48bn; £27bn) rescue plan collapsed. |
| Hypo Real Estate has said it will study alternative measures to fund its business. | Hypo Real Estate has said it will study alternative measures to fund its business. |
| European governments are as dazed and confused by the mayhem in the global banking system as most of the rest of us Robert PestonBBC business editor Peston's view: Lost in translationSend us your commentsIceland shores up economy | European governments are as dazed and confused by the mayhem in the global banking system as most of the rest of us Robert PestonBBC business editor Peston's view: Lost in translationSend us your commentsIceland shores up economy |
| The BBC business editor says the biggest worry is now in Iceland, where the government is trying to shore up the entire banking system before markets open on Monday. | The BBC business editor says the biggest worry is now in Iceland, where the government is trying to shore up the entire banking system before markets open on Monday. |
| Ms Merkel's comments came after Europe's major economies agreed to co-ordinate their response to the crisis. | Ms Merkel's comments came after Europe's major economies agreed to co-ordinate their response to the crisis. |
| She was speaking followed an emergency meeting with the central bank and financial regulator. | She was speaking followed an emergency meeting with the central bank and financial regulator. |
| "We tell all savings account holders that your deposits are safe. The federal government assures it," Ms Merkel said. | "We tell all savings account holders that your deposits are safe. The federal government assures it," Ms Merkel said. |
| "We will not allow the distress of one financial institution to distress the entire system. For that reason, we are working hard to secure Hypo Real Estate." | "We will not allow the distress of one financial institution to distress the entire system. For that reason, we are working hard to secure Hypo Real Estate." |
| Ms Merkel has previously been strongly critical of the Irish and Greek governments' decisions to take independent action to protect all savings deposits. | Ms Merkel has previously been strongly critical of the Irish and Greek governments' decisions to take independent action to protect all savings deposits. |
| Our business editor says that if the German government is making a firm commitment to guarantee all deposits, the leaders of other EU states - including the UK - would have to follow suit. | Our business editor says that if the German government is making a firm commitment to guarantee all deposits, the leaders of other EU states - including the UK - would have to follow suit. |
| 'Appalled' | 'Appalled' |
| The problems of Hypo Real Estate will put further strain on other financial institutions, which are struggling against a crisis of confidence in the global financial system. | The problems of Hypo Real Estate will put further strain on other financial institutions, which are struggling against a crisis of confidence in the global financial system. |
| Ms Merkel also said that managers at financial institutions should be held accountable for "irresponsible behaviour". | Ms Merkel also said that managers at financial institutions should be held accountable for "irresponsible behaviour". |
| Hypo's problems should have been revealed earlier, a minister says Finance Minister Peer Steinbrueck said he was "appalled" that the problems at Hypo had not been revealed earlier. | Hypo's problems should have been revealed earlier, a minister says Finance Minister Peer Steinbrueck said he was "appalled" that the problems at Hypo had not been revealed earlier. |
| Hypo Real Estate relies heavily on borrowing from other banks to fund its business and has suffered badly as banks have become increasingly cautious about lending to each other. | Hypo Real Estate relies heavily on borrowing from other banks to fund its business and has suffered badly as banks have become increasingly cautious about lending to each other. |
| Just last week, the firm announced that it had succeeded in securing a credit facility worth 35bn euros ($48bn; £27bn), stitched together by the government. | Just last week, the firm announced that it had succeeded in securing a credit facility worth 35bn euros ($48bn; £27bn), stitched together by the government. |
| Under the deal, the government was going to provide the lion's share of the loan, with a consortium of banks providing 8.5bn euros ($11.6bn; £6.6bn). | Under the deal, the government was going to provide the lion's share of the loan, with a consortium of banks providing 8.5bn euros ($11.6bn; £6.6bn). |
| It was designed to make sure that Hypo Real Estate had sufficient short and medium-term funding to make sure it could function while the international money markets remained in a deep freeze. | It was designed to make sure that Hypo Real Estate had sufficient short and medium-term funding to make sure it could function while the international money markets remained in a deep freeze. |
| But Hypo Real Estate said the banks had withdrawn support for the loan, putting the whole rescue package at risk. | But Hypo Real Estate said the banks had withdrawn support for the loan, putting the whole rescue package at risk. |
| On Saturday, leaders of the major European economies met in Paris for talks hosted by French President Nicolas Sarkozy. | On Saturday, leaders of the major European economies met in Paris for talks hosted by French President Nicolas Sarkozy. |
| Britain, Germany, Italy and France all agreed to work together to support financial institutions - but stopped short of agreeing a US-style bank bail-out plan. | Britain, Germany, Italy and France all agreed to work together to support financial institutions - but stopped short of agreeing a US-style bank bail-out plan. |
| They decided instead to seek a relaxation of the EU rules governing the amount of money individual states can borrow. | They decided instead to seek a relaxation of the EU rules governing the amount of money individual states can borrow. |
| The leaders also issued a joint call for a G8 summit "as soon as possible" to review the rules governing financial markets. | The leaders also issued a joint call for a G8 summit "as soon as possible" to review the rules governing financial markets. |
| Are you worried about your savings? Would an unlimited guarantee allay your fears? What is your reaction to the financial crisis? Send us your experiences using the form below: | |
| In most cases a selection of your comments will be published, displaying your name and location unless you state otherwise in the box below. | In most cases a selection of your comments will be published, displaying your name and location unless you state otherwise in the box below. |