Deutsche Bank's Troubles, Europe's Failures

Less than a decade after the financial crisis, Deutsche Bank is in trouble again, with investors speculating about whether the German government will have to rescue one of the world's largest financial institutions. The sad thing is how easily this predicament could have been avoided.

This time around, Deutsche Bank isn't dealing with an unforeseen market meltdown or sovereign-debt crisis. Rather, the proximate cause of distress is the U.S. Justice Department's threat to fine the firm $14 billion for decade-old transgressions involving U.S. mortgage-backed securities -- more than double what the bank has set aside to cover such legal costs. Concerns about capital adequacy have sent the stock price to record lows, and the German government says it won't provide a financial safety net.