a major issue of subprime mortgages. next to face the music was german corporate bank i k b on july twenty seventh after running into funding problems it received a bailout from the german state development bank k f w. then on august ninth the mortgage crisis hit financial markets as more people defaulted on their loans banks and investors began losing money banks lost trust in each other worried that they wouldn't get their money back this fear was reflected in a rise in interbank lending rates. on the twenty first of january two thousand and eight germany's stock exchange lost seven percent in value the biggest drop since nine eleven in the days afterwards the u.s. fed lowered interest rates again. two months later on march sixteenth bear stearns was bought by rival j.p. morgan with cash barred from the fed it had been the fifth largest investment bank