CEO John Cryan sent a letter to employees today reassuring them of the bank’s health, saying “ongoing rumours are causing significant swings in our stock price.”
And swing it has.
The stock has been on a largely downward trend ever since reports surfaced in mid-September that the U.S. Justice Department was seeking $14 billion from the bank to settle a case stemming from the 2008 financial crisis.
The bank said at the time that it would not pay the $14 billion tab.
A report today from Agence France Presse citing an unnamed source said that the bank and the Justice Department were nearing a settlement for $5.4 billion. That sent the stock soaring. The Justice Department declined to comment.
The stock’s recent decline was given new impetus in recent days after other media reports that hedge funds were pulling out of the bank.
The German bank’s U.S. shares, which are listed on the New York Stock Exchange, hit a record low on Thursday -- trading at just $11.91. For comparison, those shares were trading around double that during the financial crisis.
Across the pond, the bank was trading below 10 euros at one point today.
But in his letter, Cryan said "Deutsche Bank has strong fundamentals."
"It is our task now to prevent distorted perception from further interrupting our daily business. Trust is the foundation of banking. Some forces in the markets are currently trying to damage this trust," Cryan said, then listed four reasons why he believes the bank's fundamentals are strong.
Deutsche Bank, along with a handful of other banks, has been under the eye of U.S. authorities who believe the bank may have misled investors about the quality of investment products, which contained risky mortgages that were unlikely to be paid off, in the lead-up to the 2008 financial crisis.
“Many banks have resolved this issue, however, Deutsche Bank is still dealing with it,” Dan Deming, managing director of KKM Financial, an asset management company, told ABC News.
Lehman’s connections to other banks meant that its collapse sent ripples through the financial system, creating problems for other banks.
While Deutsche Bank is headquartered in Germany, the nature of the global financial system is such that if it were to collapse, the effects could be felt in the U.S.
“A DB default would cause financial market uncertainty and potentially a contagion the could impact Americans' equity holdings,” Jack Ablin, chief investment officer at BMO Private Bank, told ABC News in an email.
The Associated Press contributed to this report.