>> Germany's biggest lender is scrambling to settle with US authorities on a colossal fine ahead of the US presidential elections. Having been slapped with a $14 billion fine for mis-selling mortgage backed securities, a cut-price deal is critical for the bank. To regain clients, confidence and lift the share price from record lows.
Rachel Armstrong is Reuters' Financial Services Editor in London.>> Basically Deutsche needs to give its investors certainty on what's gonna happen to this. If it doesn't reach the agreement before the elections then obviously there's a large transition period between the administrations of the United States. So that will add several months onto when a settlement will come.
There's also the issue that there will be a new administration in the US that they won't know who they're dealing with. So they'll be very keen to get something done before November.>> Although smaller than its Wall Street rivals, Deutsche Bank has deep linkes with the likes of JPMorgan and Citigroup.
Its troubles could infect the global financial sector. The IMF has already warned of the dangers by calling the German lender a bigger potential risk to the wider financial system than any other global bank. Some are even starting to wonder whether Deutsche Bank could be a repeat of Lehman Brothers.
>> Deutsche Bank does at the moment have more capital, it's got more liquidity reserves than Lehman Brothers did, which is one big reassurance. We’re also in a slightly different environment for banks since the financial crisis, there’s been a lot more safety measures put in to markets since then.
So, Deutsche Bank has a lot more options, perhaps to look for help, before going into a Lehman Brothers type situation, it can turn to the European Central Bank for liquidity support if it needs. And we're also probably at a time when governments, if push comes to shove, are unwilling to let a big bank like Deutsche fail, unlike in the case of Lehman Brothers.
>> The high level of support expressed so far by German business bosses for the national banking champion will be one extra factor for the government to take into account should it be faced with that decision.