REPORT: Deutsche Bank is close to a $5.4 billion settlement with the US government

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REPORT: Deutsche Bank is close to a $5.4 billion settlement with the US government

Deutsche Bank is taking off after Agence France-Presse reported the bank is closing in on a $5.4 billion settlement with the US government over mortgage-backed securities from the financial crisis.

This is much lower than the $14 billion settlement originally reported two weeks ago.

The settlement announcement could come in the next few days, according to the AFP report, which cited a source close to the matter.

After sinking to an all-time low on Thursday, US-traded shares of Deutsche Bank are up around 15% and German shares are up over 6% on Friday following the news.

The last two weeks have been troubling for the German bank. After a report that it may be subject to $14 billion in fines by US regulators over bad derivative products from the financial crisis, shares of Deutsche began a tailspin.

Additionally, rumors of a bailout — or lack thereof — from the German government and hedge funds decreasing their exposure to Deutsche Bank haven't helped.

On Friday, however, CEO John Cryan sent a letter to employees assuring them that the bank is still stable. Additionally, the consensus from analysts is that the bank will not settle for the $14 billion and should be able to make it out of the current crisis (though that wouldn't remedy larger, long-term issues).

Following the positive news, shares have popped over 15% as of 2:05 p.m. ET, to $13.21 a share.



German shares are also well off their lows of the day, up 6.4%, at €11.57 per share.

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