Steinbrück expects private banks to ask for state aid

AFP
AFP - [email protected] • 30 Oct, 2008 Updated Thu 30 Oct 2008 08:48 CEST
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A certain number of German banks will apply for state aid in the coming days, including some who had said they would not need it, Finance Minister Peer Steinbrück told the Financial Times Deutschland on Thursday.

"In the next four to five days a string of financial institutions will ask for our help," Steinbrück said. According to the FTD, which cited other sources close to the government, major German banks planned to ask as a bloc for support from a financial market stabilization authority that was created by lawmakers on October 17.

The authority can guarantee interbank loans and recapitalize banks with funds of up to €480 billion ($630 billion) as part of a vast sector rescue plan unveiled three weeks ago.

Private banks have until now been reticent to ask for state aid, with the boss of the biggest German bank, Deutsche Bank, saying he would be "ashamed" to call upon the government for help.

The Süddeutsche Zeitung newspaper also said on Thursday that private banks were preparing a joint request, citing not only Deutsche Bank but also number two Commerzbank, Postbank and Dresdner Bank.

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AFP 2008/10/30 08:48

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