February 16, 2009

Germany may take over Hypo Real Estate

The German government is considering taking over Hypo Real Estate, a mortgage lender under investigation for insider trading, an official said.

The investigation is on-going, the Federal Financial Supervisory Authority said.

The German Cabinet will discuss the possibility of nationalizing the mortgage lender Wednesday, Deutsche Welle reported Monday. That action would require changing current bailout rules that allow the state to only take control of one-third of a bank.

Extraordinary crisis require extraordinary solutions, Chancellor Angela Merkel said.

Several banks, meanwhile, are under investigation for having sold Hypo Real Estate shares just before the company collapsed in September, Deutsche Welle reported.