21.12.2007 15:00 Real Estate
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In a pre-release of an article to be published Sunday, Der Spiegel quoted an internal KfW paper which said that 85 percent of the five-billion-euro burden would be accounted for by 2011.
A German banking pool led by KfW threw a 3.5 billion euro lifeline to IKB when problems emerged in the US market for high-risk home loans in July and August, with most of the amount borne by KfW.
Measures to save IKB, which specialises in loans to German businesses, have almost used up a 5.3 billion euro KfW fund established for general banking risks, the report said.
IKB had invested heavily in securities backed by high risk US home loans on which borrowers defaulted, and was saved from bankruptcy by the banking pool and a credit of 8.1 billion euros provided by KfW.
The pool agreed recently to another credit line of 350 million euros but said it wanted no involvement with any future rescue plans.
KfW now wants to sell its stake but must wait until after IKB's 2006/2007 results have been published.
