COMPANIES Germany moved closer to its first bank nationalisation in more than 75 years after the country’s parliament on Friday approved a bill that paved the way for the government to take control of Hypo Real Estate, the moribund property lender.
A provision in the “Emergency Takeover Law” will allow for expropriation of shareholders as a last resort to stabilise stricken financial institutions. The measure is seen to be clearly aimed at HRE, which has been propped up by government credit guarantees since September. The expropriation powers granted by the law will expire at the end of June – a provision aimed at reassuring investors that the government does not plan for the widespread and lasting use of the powers. No other banks are thought to be candidates for wholesale nationalisation.
