Explanatory Statement

The German financial sector’s risk shielding of Hypo Real Estate (HRE) has been reported misleadingly in some sections of the media. For this reason, the following clarification is necessary.

The risk-shielding strategy, which was agreed last weekend by the German financial sector in consultation with BaFin and the Bundesbank, has the objective of enabling the HRE Group to eliminate its liquidity difficulties and resize its risk positions.