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Friday, August 3, 2007

Germany Rescues German Subprime Lender

US subprime problems have far reaching consequences in this global economy of ours...

" Shares of IKB Deutsche Industriebank AG plunged as German banking associations and state-owned KfW Group agreed to provide 3.5 billion euros ($4.8 billion) to cover potential losses from the U.S. subprime mortgage rout.

The shares fell 6.83 euros, or 40 percent, to 10.35 euros at 4:28 p.m. in Frankfurt today. The stock tumbled as much as 43 percent before the BdB banking association head Manfred Weber, who represents private banks such as Deutsche Bank AG and Commerzbank AG, said in a statement that the BdB will contribute as much as 500 million euros to ``stabilize the bank and prevent market disruption.''

Dusseldorf-based IKB on July 30 replaced its chief executive officer and said it'll miss its full-year profit target because of losses on U.S. subprime holdings. The rescue package covered as much as one-fifth of IKB's roughly 17.5 billion-euro exposure to the U.S. subprime mortgage market, Reuters reported, citing an unidentified person close to the plan. "

Subprime problems are contained. Don't even worry about it. Have another drink. This party is just getting started. >grin<

Source: IKB Shares Fall as German Banks Agree on Bailout (Update1) (