Indications of diminishing confidence in the firm picked up this week. Selling began Monday following a weekend report that German Chancellor Angela Merkel ruled out state aid for her country's largest lender and any interference in the Justice Department investigation, according to a Reuters translation.
One of the messages the German chancellor may have wanted to send was to tell the United States, "if you take down Deutsche Bank, it's going to affect you as much as it did us," said George Friedman, chairman of Geopolitical Futures, an online publication that forecasts global events.
The last few days have seen various statements in which German authorities and Deutsche Bank representatives, including CEO John Cryan, have repeatedly said there is no need for government support.
The Department of Justice has been relatively quiet in contrast. Principal Deputy Associate Attorney General Bill Baer said at a conference Tuesday how banks generally could receive credit for their cooperation with investigations into residential mortgage-backed securities. And rather than make an official government announcement, The Wall Street Journal was the first to report two weeks ago that the Justice Department had proposed the $14 billion settlement. Deutsche Bank then confirmed the news in a press release.
"My guess is the U.S. regulators would (have) called it off if you thought it would really damage Deutsche Bank," said Maris Ogg, president at Tower Bridge Advisors. "You've got to worry about, certainly the U.S. regulators are not going to bring a bank down that's going to jeopardize the system."