The Wall Street Journal-20080214-Germany to Help Bail Out IKB Bank

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Germany to Help Bail Out IKB Bank

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Associated Press

The German government will step up with 1 billion euros ($1.46 billion) to help bail out IKB Deutsche Industriebank AG, wracked by losses from the U.S. subprime-loan crisis, Economics Minister Michael Glos said.

After an emergency meeting of officials, Mr. Glos said the bank needs a total of 1.5 billion euros. Other banks and investors would be needed to come up with the rest of the money.

The bank's problems sprang from its Rhineland Funding investment vehicle's apparent inability to cover its funding needs because of exposure to U.S. subprime loans.

Finance Minister Peer Steinbruck said allowing IKB bank to go bankrupt would "threaten a significant loss of confidence for Germany's entire financial sector."