It seems the accelerating similarities between Deutsche Bank (once the most systemically dangerous bank in the world) and Lehman Brothers has finally forced the German government’s hand…

The German finance ministry’s oft-reported plans to merge struggling Deutsche Bank with its not all that much better off domestic rival Commerzbank have elicited a flood of criticism in the financial press (including an editorial in the Financial Times) following another round of rumor-mongering last week.

But apparently this hasn’t dented the German government’s enthusiasm for orchestrating a merger between two of the country’s largest banks. To wit, the government’s plans to help guide the two toward a merger are intensifying, according to a Bloomberg report, as officials study ways to facilitate a merger – including potential changes to the tax code to make a merger less costly. Still, BBG cautioned that the talks remain in an “exploratory phase.”

Shares of both banks rallied on the news and the euro climbed to fresh session highs.

DB’s CEO Christian Sewing has repeatedly insisted that a merger isn’t in the cards, but as more legal problems are cropping up, which recently pushed the bank’s shares to record lows, his options for a better alternative are dwindling. Tellingly, both Deutsche Bank and the German Finance Ministry have refused to comment on the report.



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