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NRS-Import

German lawmakers to investigate Hypo Real Estate debacle

German lawmakers are launching a fact-finding commission over the near-bankruptcy of crisis-hit Hypo Real Estate bank.

Hypo Real Estate sign

Hypo Real Estate has been kept afloat by government aid

The fact-finding commission will be charged with figuring out whether, and to what extent, the state is responsible for the billions of euros of losses at the bank.

The opposition parties Free Democrats, Greens and the Left voted in parliament to set up the commission, while the Christian Democrats and the Social Democrats who form the government coalition abstained.

Committee under time pressure

The committee will be comprised of lawmakers and its goal is to uncover whether poor crisis management on the part of the government has left the taxpayer carrying the burden, and what lessons can be learned from the situation.

Hypo Real Estate bank is in the process of being nationalized. The listed company has been saved from bankruptcy only by receiving more than 100 billion euros ($130 billion) in state and private aid.

A bankruptcy could have unforeseen consequences affecting the entire financial system.

If the Hypo Real Estate committee has not produced results by the time lawmakers face their next election on September 27, 2009, any evidence gathered up to that point will become invalid. So it is important that work begin as soon as possible, committee organizers have said.

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