This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7653317.stm

The article has changed 15 times. There is an RSS feed of changes available.

Version 3 Version 4
Merkel guarantees German savings Merkel guarantees German savings
(20 minutes later)
Germany will guarantee all private savings accounts, says Chancellor Angela Merkel, as a major bank struggles to stay in business.Germany will guarantee all private savings accounts, says Chancellor Angela Merkel, as a major bank struggles to stay in business.
Ms Merkel was speaking after an emergency meeting with the central bank and financial regulator.Ms Merkel was speaking after an emergency meeting with the central bank and financial regulator.
Hypo Real Estate, Germany's second biggest commercial property lender, is in trouble after a 35bn euro ($48bn; £27.2bn) rescue plan collapsed.Hypo Real Estate, Germany's second biggest commercial property lender, is in trouble after a 35bn euro ($48bn; £27.2bn) rescue plan collapsed.
Hypo has said it will study alternative measures to fund its business.Hypo has said it will study alternative measures to fund its business.
"We will not allow the distress of one financial institute to distress the entire system. For that reason, we are working hard to secure Hypo Real Estate," Ms Merkel said. Ms Merkel has been strongly critical of the Irish decision to take independent action to protect all savings deposits.
"We will not allow the distress of one financial institute to distress the entire system. For that reason, we are working hard to secure Hypo Real Estate," she said on Sunday.
The BBC's Tristana Moore in Germany says the government is under intense pressure to save the bank before markets reopen on Monday.The BBC's Tristana Moore in Germany says the government is under intense pressure to save the bank before markets reopen on Monday.
But out correspondent says tax-payers must also be convinced that a bail-out would be justified. But our correspondent says tax-payers must also be convinced that a bail-out would be justified.
On Saturday, European leaders at a Paris summit stopped short of offering a US-style bank bail-out plan.On Saturday, European leaders at a Paris summit stopped short of offering a US-style bank bail-out plan.
The collapse of Hypo Real Estate will put further strain on other financial institutions in other countries, struggling against a crisis of confidence in the global financial system.The collapse of Hypo Real Estate will put further strain on other financial institutions in other countries, struggling against a crisis of confidence in the global financial system.
'Responsibility''Responsibility'
Ms Merkel also said that managers at financial institutions should be held accountable for what "irresponsible behaviour".Ms Merkel also said that managers at financial institutions should be held accountable for what "irresponsible behaviour".
Finance Minister Peer Steinbrueck said he was "appalled" that the problems had not been revealed earlier.Finance Minister Peer Steinbrueck said he was "appalled" that the problems had not been revealed earlier.
It has to be indicated to the markets... that European countries will not react as every man for himself Dominique Strauss-Kahn, IMF head Peston: How to solve crisisSend us your commentsNo business rush to Irish banks 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.It has to be indicated to the markets... that European countries will not react as every man for himself Dominique Strauss-Kahn, IMF head Peston: How to solve crisisSend us your commentsNo business rush to Irish banks 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 stitched together by the government.Just last week, the firm announced that it had succeeded in securing a credit facility worth 35bn euros 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.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.
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.
Executive 'sanctions'Executive 'sanctions'
News of the failed plan came after leaders of the major European economies met in the French capital for talks hosted by President Nicolas Sarkozy.News of the failed plan came after leaders of the major European economies met in the French capital for talks hosted by President Nicolas Sarkozy.
Britain, Germany, Italy and France all agreed to work together to support financial institutions but did not agree to set up a big rescue fund similar to that of the US.Britain, Germany, Italy and France all agreed to work together to support financial institutions but did not agree to set up a big rescue fund similar to that of the US.
Hypo's problems should have been revealed earlierHypo's problems should have been revealed earlier
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.
Speaking after the meeting at a joint news conference, Mr Sarkozy said the four had agreed that the heads of a financial institution that had to be rescued should be "sanctioned".Speaking after the meeting at a joint news conference, Mr Sarkozy said the four had agreed that the heads of a financial institution that had to be rescued should be "sanctioned".
Chancellor Merkel called on EU countries not to take steps at home that could cause problems for other member states.Chancellor Merkel called on EU countries not to take steps at home that could cause problems for other member states.
The Irish and Greek governments have been criticised within the EU for deciding to act independently by guaranteeing to protect all savings deposited in their banks.
UK Prime Minister Gordon Brown, meanwhile, called on European leaders to send the message that "no sound, solvent bank should be allowed to fail through lack of liquidity".UK Prime Minister Gordon Brown, meanwhile, called on European leaders to send the message that "no sound, solvent bank should be allowed to fail through lack of liquidity".
He also said the meeting had agreed to ask the European Investment Fund to release 15bn euros ($21bn; £12bn) in loans to help small businesses operate.He also said the meeting had agreed to ask the European Investment Fund to release 15bn euros ($21bn; £12bn) in loans to help small businesses operate.
The head of the International Monetary Fund (IMF), Dominique Strauss-Kahn, had earlier urged EU action, saying the financial crisis was presenting Europe with a "trial by fire".The head of the International Monetary Fund (IMF), Dominique Strauss-Kahn, had earlier urged EU action, saying the financial crisis was presenting Europe with a "trial by fire".
Calls for European action followed the bail-out of both Bradford and Bingley in the UK and Fortis Bank by the governments of Belgium, Luxembourg and the Netherlands.Calls for European action followed the bail-out of both Bradford and Bingley in the UK and Fortis Bank by the governments of Belgium, Luxembourg and the Netherlands.