The head of the European Investment Bank (EIB), Werner Hoyer has told a German newspaper that the bank could recall billions in loans it made over recent years to Volkswagen.

Some of these funds were used to develop low emission engines.

Mr Hoyer said the EIB had granted loans to a value of €4.6bn over the past twenty-five years and that the bank’s reputation could have taken a hit from the emissions scandal because its loans were linked to certain climate impact targets.

The EIB will now carry out a thorough investigation into how its loan funds were used.

It’s just the latest problem that VW faces. The Chinese government says it will launch an investigation into VW’s emission compliance standards - the government has also stressed that none of the 11 million vehicles identified with possible problems were manufactured in China.

China is VW’s largest market by sales volume.