Deutsche Bank is throwing its energies into reaching a settlement before next month's presidential election with US authorities demanding a fine of up to $US14 billion ($A18 billion) for mis-selling mortgage-backed securities.
The threat of such a large fine has pushed Deutsche shares to record lows and a cut-price settlement is urgently needed to reverse the trend and help to restore confidence in Germany's largest lender.
A media report late on Friday that Deutsche and the US Department of Justice (DOJ) were close to agreeing a settlement of $US5.4 billion lifted the stock to close six per cent higher, but that report has not been confirmed.
Deutsche is much smaller than Wall Street rivals such as JPMorgan and Citigroup.
But it has significant trading relationships with all of the world's largest finance houses and the International Monetary Fund (IMF) this year identified it as a bigger potential risk to the wider financial system than any other global bank.
Deutsche chief executive John Cryan will be in Washington this week for the annual meeting of the IMF, and the Frankfurter Allgemeine Zeitung reported that other executives would join him to try to negotiate a settlement with the US authorities.
Like fellow large European banks also under investigation for mis-selling mortgage-backed securities, Credit Suisse and Barclays, Deutsche will want to get a deal done with the current administration still in power.
A new administration to be installed after the November 8 election will bring unknown risks and likely delays.
At home, Deutsche Bank is fighting a rearguard action, seeking to shore up confidence among the public, politicians and regulators who say the bank brought many of its problems upon itself by overreaching itself and then reacting too slowly to the 2008 financial crisis.
It suffered a further blow to its image this weekend with a third IT outage in the space of a few months on Saturday that prevented some customers getting access to their money for a short time.
Deutsche Bank and the government in Berlin have had to play a delicate balancing act, emphasising the substance and importance of the bank without implying any need for state aid or willingness to supply it.
