German property lender Hypo Real Estate is one of the latest to find that banks are unwilling to keep extending its lines of credit.
The German government has been trying to avoid going the route of wholesale nationalisation of threatened financial institutions. However, a partnership approach between government and a consortium of banks appears to have collapsed.
The banks haven't given a reason. But they may have realised that Hypo Real Estate, with its 400bn Euro balance sheet, will need a lot more than the 35bn Euros they had agreed to raise.
