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Deutsche Bank Watchdogs Prefer Merger With European Firm, Not Commerzbank

  • ECB sees cross-border deal as promoting European integration
  • German banking regulator wants to give CEO Sewing more time
The Deutsche Bank AG logo sits on the bank's headquarters in Frankfurt, Germany, on Wednesday, July 25, 2018. Deutsche Bank vowed to maintain its position in fixed-income trading after recording its weakest second quarter in that business since the global financial crisis, as Chief Executive Officer Christian Sewing accelerates the lender’s turnaround effort.
The Deutsche Bank AG logo sits on the bank's headquarters in Frankfurt, Germany, on Wednesday, July 25, 2018. Deutsche Bank vowed to maintain its position in fixed-income trading after recording its weakest second quarter in that business since the global financial crisis, as Chief Executive Officer Christian Sewing accelerates the lender’s turnaround effort.Photographer: Alex Kraus/Bloomberg
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Deutsche Bank AG’s key regulators would prefer the lender merge with a European rival rather than local competitor Commerzbank AG, setting them apart from forces in the government keen on an all-German deal.

The European Central Bank favors a cross-border combination to drive integration in the region’s financial markets, according to people familiar with the matter. Analysis by German regulator BaFin suggests a preference for a European deal because the two domestic banks are currently too weak to benefit sufficiently from a merger, said the people, who asked not to be identified because the deliberations are private.