It’d been quiet for a while over at Hypo Real, but the issued a reality check via its board head Michael Endres in an interview with Welt am Sonntag.
“The bank clearly has a solvency problem. It wouldn’t surprise me if a capital injection of €10bn proved insufficient.”
Remember that when it all got really nasty last October, Hypo Real was saved via a partially private, €50bn bailout engineered by the Bundesbank. The Telegraph article we link to adds that Spanish mortgage bonds are being sold off at 14.5 cents to the dollar by GMAC and that German and French banks are likely to suffer as a result. Presumably, Hypo Real is one of the German banks this revelation will threaten.