The German government has denied it is working on a rescue of Deutsche Bank as Germany's biggest lender boosted its balance sheet by selling its British insurance business. As Sonia Legg reports, Deutsche is facing a $14 billion fine from the U.S. Department of Justice and concerns over its funding pushed its shares to a record low on Tuesday.
It's an imposing lender with a long way to fall. The prospect of a Deutsche Bank collapse almost unthinkable. (SOUNDBITE) (English) JASPER LAWLER, ANALYST, CMC MARKETS, SAYING: "If Deutsche Bank gets into trouble we really are facing another Lehman Brothers moment, if not worse - it is a bigger bank." No surprise then - that after two days of record low share drops following news of a possible $14 billion U.S. fine - some are nervous. Die Zeit newspaper says the government is working on a rescue plan and is willing to take a 25 percent stake in the bank in an extreme emergency. That's been dismissed by the Finance Ministry. But with Italy's banks in crisis - ruling out a rescue could be tricky. (SOUNDBITE) (English) JASPER LAWLER, ANALYST, CMC MARKETS, SAYING: "I think we have got to believe when push comes to shove the German government would have to save Deutsche Bank not just for the sakes of the political ramifications with the likes of Italy but also because it is a really interconnected global national bank that just so happens to be based in Germany." Deutsche's CEO John Cryan knew he had to overhaul the bank when he took over in July last year . Jobs have been cut and assets sold - the latest to go, British insurer Abbey Life to Phoenix for $1.2bln. But some wonder why it's taken so long. (SOUNDBITE) (English) JASPER LAWLER, ANALYST, CMC MARKETS, SAYING: "I think both the government and the heads of these banks in Europe have been a bit slower to react and slower to kind of accept some of the problem. Maybe that reflects the fact that the problems are just that much worse in Europe." But face the music they must - Deutsche Bank perhaps taking some comfort from the fact that it's not the only bank facing monumental problems