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European regulators and government officials have kept a low profile in public over Deutsche’s deepening woes. However, in private they have struck a sanguine tone, stressing that in extremis there is scope under European regulation to inject state funds to support the bank, provided it is done in line with market conditions.Marcel Fratzscher, head of DIW Berlin, a think-tank, said: “If push comes to shove, the German government would contribute because Deutsche Bank is the only global bank that Germany has.”A person briefed on the situation at Deutsche said some of the bank’s hedge fund clients had imposed risk limits on the business they do with it in response to the negative headlines swirling around the lender and the recent rise in its credit default swap prices, a key indicator of credit risk.

Source: Hedge funds pull business from Deutsche Bank – FT.com