The German property giant Hypo Real Estate may need at least €10bn (£8.6bn) in fresh capital from the German state to stay afloat, according to the chairman of the oversight board.

The admission is the latest evidence that mounting losses in Europe’s banking system have yet to be tackled.

'The bank clearly has a solvency problem,' said Michael Endres, head of the board, in an interview with Welt am Sonntag. 'It wouldn’t surprise me if a capital injection of €10bn proved insufficient.'

Daily Telegraph