European Nations Scramble on Rescues

Germany guarantees all the country's bank deposits and arranges a rescue of Hypo Real Estate, while France's BNP Paribas agrees to buy some Fortis assets.
Publish date:

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



Also Sunday, Italian bank


approved raising 6 billion euros of fresh capital after its shares came under attack last week.

This article was written by a staff member of