GERMANY - The upper and lower houses of the German parliament today passed an act designed to stabilise the financial market but which will see also Pensionsfonds able to secure funding from the government.

Earlier this week, the German Federal Cabinet passed the Financial Markets Stabilisation Act which will not only cover German credit institutions and financial services providers, but also insurance companies and Pensionsfonds within the German Insurance Supervisory Act.

Marc Benzler of Clifford Chance in Frankfurt explained the act will see Pensionsfonds able to draw on the facilities provided by the government: "If they need funds' liquidity, or a guarantee for refinancing, they may be eligible to draw on this act."

He added the government still needs to pass draft regulation on Monday to provide more details on the bill

The act will create a €500bn financial market stabilisation fund, which can be used to finance targeted measures within a narrow timeframe.

The fund will be controlled by the Federal Ministry of Finance and managed by the German Central Bank.

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