The German Financial Market Stabilization Program

October 21, 2008

The Alert Memorandum discusses the recently enacted German Act on the Implementation of Measures to Stabilize the Financial Market. Key elements of the Act include:

• the creation of a public Financial Market Stabilization Fund;
  
• the authorization of the German Federal Ministry of Finance to improve the access of financial institutions to liquidity and strengthen the confidence in the inter-bank market by issuing on behalf of the Fund credit guarantees in an amount of up to €400 billion for certain liabilities of financial institutions; and
  
• the authorization of the Fund for an aggregate amount of up to €80 billion (i) to participate in the recapitalization of distressed financial institutions and (ii) to acquire or hedge certain risk assets of financial institutions to provide relief to their capital base.

Please contact any of the following partners of our Frankfurt office if you have any questions in this context:

Christof von Dryander:  
Gabriele Apfelbacher:
Thomas Kopp: