Merkel urges banks to tap German rescue fund

BERLIN (Reuters) - Chancellor Angela Merkel urged German banks on Saturday to tap a 500 billion euro ($638.9 billion) government rescue package for the financial sector.

Merkel said the government had acted swiftly to agree the package in response to the global financial crisis. The government unveiled the measures last month to help restore confidence in the financial system.

"Now the point is that our banks and financial institutions draw on this package," Merkel said in her weekly podcast.

Hypo Real Estate said on Thursday it had secured 15 billion euros in loan guarantees it had requested from the government's rescue package, making it Germany's first bank to use the lifeline.

Finance Minister Peer Steinbrueck told the Financial Times Deutschland newspaper in an article published on Thursday that a large number of domestic banks would tap into the rescue package in the coming days.

(Writing by Paul Carrel; editing by Chris Pizzey)