- Title: GERMANY/FILE: The CEO of Germany's embattled Hypo Real Estate (HRE) resigns
- Date: 8th October 2008
- Summary: (EU) MUNICH, GERMANY (OCTOBER 07, 2008) (REUTERS) EXTERIORS OF HYPO REAL ESTATE (HRE) MUNICH HEADQUARTERS LOGO ON WALL WOMAN ENTERING BUILDING LOGO ON WALL MAN SEEN ON BALCONY TALKING ON PHONE
- Embargoed: 23rd October 2008 13:00
- Keywords:
- Topics: Finance
- Reuters ID: LVACPUWCUL1PZGM6LXNNFUWKPBZO
- Story Text: Hypo Real Estate's CEO Funke resigns, two days after German government and banks agree on new rescue plan for embattled lender.
The head of Germany's imperilled Hypo Real Estate (HRE) has resigned on Tuesday (October 7), two days after the German government and banks agreed a new rescue package for the lender and calls from Finance Minister Peer Steinbrueck and other politicians for Georg Funke to leave his post.
A statement form Hypo said Funke was leaving the group "with immediate effect in agreement with the supervisory board."
The statement continued saying that "for the time being, Funke's responsibilities will be assumed within the existing assignment of responsibilities of the management board."
Under the deal reached late on Sunday, commercial banks and insurers would provide an extra 15 billion euros ($20.8 billion) in liquidity for HRE on top of the 35 billion euros they already committed together with the Bundesbank, according to the finance ministry.
Berlin was forced to call together officials from the Bundesbank, Bafin financial regulator, and the banking and insurance industries to agree additional guarantees for Hypo.
New refinancing problems at the Munich-based lender had came to light, which made a 35 billion ($47.57 billion) euro rescue agreed last week obsolete. The government has said the rescue was necessary to prevent the woes spreading to other banks.
The need of a second rescue operation for HRE triggered an outcry among German politicians and the public and provoked calls for the 53-year old manager to resign, saying he had been too optimistic about the bank's condition.
A lack of confidence has never been Funke's weakness.
When HRE sprang a nasty surprise on investors in January by announcing hundreds of millions of euros in unexpected subprime-related writedowns, Funke fended off questions from journalists as to whether he would quit over the matter.
"The management has done a fantastic job," Funke, who has been a real estate banker all his life, told reporters at the time. "We have not made any mistakes."
The share has been in free fall ever since, from 34 euros in January to around 4.50 now. - Copyright Holder: REUTERS
- Copyright Notice: (c) Copyright Thomson Reuters 2011. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: None