德国斥资700亿欧元挽救德国最大银行
Plan to save German bank 'agreed'

Hypo's problems should have been revealed earlier, a minister says

The German government and banks have agreed a 50bn euro ($70bn; £40bn) plan to save one of the country's biggest banks, the finance ministry says. The news comes after Chancellor Angela Merkel said she would do all she could to save faltering Hypo Real Estate.

The government and the banks have found an extra 15bn euros after the collapse of a previous rescue plan. Meanwhile, French giant BNP Paribas has confirmed reports it is to take over the troubled Fortis bank, AFP reports.

Prime Minister Yves Leterme says the Belgian and Luxembourg governments will in turn take a blocking minority share in BNP Paribas, according to the AP news agency. The Iceland government is also working overnight to try to shore up its entire banking system.

Earlier, Ms Merkel moved to reassure German savers that all their deposits would be safe. "With this mutually agreed solution, the institution [Hypo Real Estate] will be stabilised and with it, Germany strengthened as a place to conduct finance in difficult times," the finance ministry said.

After an emergency meeting with the central bank earlier, 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 tell all savings account holders that your deposits are safe. The federal government assures it."

But BBC business editor Robert Peston says it is unclear if this is a 100% government guarantee of all savings deposits. He says that if it is, other EU states - including the UK - would have to follow suit.

Ms Merkel has previously been strongly critical of the Irish and Greek governments' decisions to take independent action to protect all savings deposits. The problems of Hypo Real Estate have 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". Finance Minister Peer Steinbrueck said he was "appalled" that the problems at Hypo had not been revealed earlier.