DEUTSCHE BANK IS IN TROUBLE. If you’re wondering what all the noise is about, here’s the rundown: The bank’s shares are down more than 50% this year to their lowest levels in 20 years, and German Chancellor Angela Merkel has reportedly ruled out state assistance. She also rejected the notion that she would run interference with the US Justice Department’s investigation into a USD 14 bn dispute regarding the sale of mortgage products. For its part, the bank said “it had not expected Ms Merkel to intervene in the US case,” according to BBC. Deutsche “is determined to meet the challenges on its own" and has "no intent to settle these potential civil claims anywhere near the number cited. The negotiations are only just beginning."

The International Monetary Fund has highlighted Deutsche as the world’s riskiest globally significant lender, according to The Financial Times (paywall) and investors including Marshall Wace, Highfields, Discovery, and Soros Fund Management have all established significant short positions on the bank.

Not everyone is worried, however. “Regardless of what Ms Merkel says, the view of the market is that the German government will stand firmly behind Deutsche Bank, for good nationalistic reasons and because if there was a serious problem for Deutsche Bank it would be a massive dislocation for the whole system,” Atlantic Equities analyst Chris Wheeler says. And it doesn’t look like Deutsche is about to pull a Lehman: Bloomberg Gadfly says while the threat of “a downward spiral involving credit downgrades isn’t here yet,” if Deutsche Bank “is backed into a corner and forced to pay a steeper-than-expected fine, the concern is that it will be forced to skip coupons on some debt instruments and take a bigger hit on already painful asset sales.”

Worth reading again from our weekend edition is The Economist’s presentation of Hyman Minsky’s work as part of its “six big economic ideas” series. PIMCO’s Paul McCulley coined the term “‘Minsky moment’ to describe a situation when debt levels reach breaking-point and asset prices across the board start plunging” and the newspaper cautioning that “the warnings of Minsky will fade away. The further we move on from the last crisis, the less we want to hear from those who see another one coming.”