German Chancellor Angela Merkel said yesterday that Germany will guarantee all private bank accounts in an attempt to calm depositors.

"We want to tell savers that their deposits are safe," Ms Merkel told reporters at a news conference a day after she returned from an emergency summit of European leaders in Paris. "The government will vouch for that," she was quoted as saying.

As reported elsewhere by WealthBriefing, the German government's guarantee was prompted by the collapse of a plan to rescue Hypo Real Estate, a large, commercial-property lender, after its liabilities were discovered to be worse than expected, German officials said.

Meanwhile, another European government moved to protect savers, joining states such as Ireland and Greece. Denmark said commercial lenders will provide as much as DKr35 billion ($6.4 billion) over the next two years to a fund to insure depositors against losses.