Germany Makes Its Big Bank Problem Even Bigger

Germany has come up with a solution to the deep troubles at one of the world’s largest banks: make it part of an even bigger one. The people who oversee Europe’s financial system had better be ready for the consequences if this doesn’t end well.

The Frankfurt-based Deutsche Bank is in talks to merge with crosstown rival Commerzbank — a move that Germany’s finance ministry has favored for months. The result would be a behemoth with assets of about 1.8 trillion euros, equivalent to more than half of Germany’s annual economic output; the merged bank would be Europe’s third biggest after the U.K.’s HSBC and France’s BNP Paribas.