Germany to fund lender rescue plans

Germany plans to finance part of its 500 billion euro bank rescue package by issuing bonds to banks in exchange for new preferred stock, according to Finance Agency head Carl Heinz Daube.

"The banks will not be allowed to sell the injected government bonds," Daube said in an interview in Tokyo yesterday. "So far there's obviously not a huge demand for any rescue measures, but this might change in the coming weeks."

Germany's rescue plan, approved by lawmakers on Oct 17, amounts to about 20 percent of the gross domestic product of Europe's biggest economy.