Berlin  - The European Central Bank (ECB) has agreed to relax quality rules for securities to expedite the rescue of German lender Hypo Real Estate (HRE), according to German Finance Minister Peer Steinbrueck Monday.

He spoke just hours after Germany unveiled an emergency loan package of 50 billion euros for HRE, 35 billion of which is backstopped by a joint government and banking industry guarantee.

His remarks in Berlin were the first indication of how the rest of the credit is to be secured.

Steinbrueck said financial securities that had been disdained in the past by central banks would be used for much of the expansion of the bail-out.

The ECB had agreed to this means to expand liquidity, he told reporters, but added, "Nobody can forecast just yet how much this paper is actually worth."

The ECB is the top tier in the euro zone central banking system, with national and provincial central banks under it.

Normally central banks accept only the best quality of bonds and other financial assets to secure their loans to commercial banks. Assets can be ranked from the best, such as government bonds, to the worst, so-called junk bonds.

Steinbrueck added that a vehicle for the HRE bail-out would be established under the management of Germany's deposit assurance fund, apparently to take over HRE's distressed assets.

HRE shares plunged 44 per cent to 4.22 euros at the start of trading Monday in Frankfurt amid fears the bail-out might still be insufficient.

Financial sources who asked not to be identified said the principal shareholder, the JC Flowers group, was committed to retaining its 24.9 per cent of HRE despite the drastic shrinkage in its value.

Sources also told Deutsche Presse-Agentur dpa that HRE chief executive Georg Funke was under massive pressure from other banks to resign. HRE declined comment. (dpa)