KfW, the German state development bank that agreed a rescue package for troubled lender IKB Deutsche Industriebank in July, has doubled the amount of money set aside to cover potential losses to €4.8bn ($7.1bn) in response to a deterioration in the value of assets held by its off balance sheet vehicle.

KfW, which convened an emergency meeting for members of its administrative board today, said: "As a result of the new risk estimates from Rhineland Funding, KfW has increased the risk provisioning by €2.3bn to €4.8bn."