European Nations Scramble on Rescues
Updated from Sunday, Oct. 5
European governments scrambled to work out rescues for ailing financial institutions Sunday.
Germany said Sunday it would guarantee all private German bank accounts as it arranged a rescue of troubled lender Hypo Real Estate.
The German government and the country's banks and insurers confirmed Sunday they agreed on a 50 billion euro ($68 billion) rescue package for Hypo.German officials said they took the step to avert a potential panic on Monday after an earlier government-backed rescue plan for Hypo fell apart. The announcement comes just one day after German Chancellor Angela Merkel met with leaders from France, Italy and the U.K. The leaders vowed to prevent bank failures on their own turf. Meanwhile, France's BNP Paribas, agreed to take control of Fortis NV in Belgium and Luxembourg for 14.5 billion euros ($19.8 billion) after a rescue plan last week for Fortis failed to prevent customers from withdrawing money from the banking and insurance company. BNP Paribas will pay 9 billion euros in stock and 5.5 billion euros in cash for 75% of Fortis Bank Belgium, all of the Belgian insurance operations, and 67% of Fortis's bank in Luxembourg, the Paris-based bank said, according to Bloomberg. Also Sunday, Italian bank UniCredit approved raising 6 billion euros of fresh capital after its shares came under attack last week.
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