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Deutsche Bank, Commerzbank merger talk 'speculation' - German finmin

Reuters  |  LONDON 

By Jones and Marc Jones

(Reuters) - German said on Friday he was in talks with banks about their future and called reports of a merger of and "speculation".

have said would want a merger of its two main banks to go through before European in May.

Scholz said he couldn't imagine what the elections have to do with the sector and was speculation that he could not understand.

"The truth is we are discussing the situation of the financial industry in Germany, it's the task of our government," Scholz told a event in

"We are discussing about clearing, we discuss about the development of the sector. We are debating whether the different banks, about their situation, for being able to do the necessary things when something needs to be done."

"Today is not a situation where it's necessary to report anything," Scholz said.

There was "no debate" about a setting up a to hold souring loans of lenders.

Deutsche is considered one of the most for the global financial system, along with JPMorgan, and

But Deutsche has been plagued by three years of losses, ratings downgrades, failed stress tests, and money laundering scandals. is still partially held by government after a bailout.

"There are two banks, they are doing anything to get enough profits. We are discussing with them about the situation of the industry in Germany," Scholz said.

A is needed to underpin German companies who want to go abroad to export, he said. It was important to have both international and national banks operating in to serve the economy.

"It's important to have a strong banking sector to do what national champions are doing and able to do."

HARD BREXIT-PROOF

WirtschaftsWoche magazine cited an unnamed source on Friday saying and would decide on a potential merger between before the next EU elections in May.

WirtschaftsWoche said and the EU needed to coordinate on the matter because a potential merger could entail action by the German state which could be seen as state aid.

Britain is set to leave the on March 29, but has so far not agreed a divorce settlement with the bloc to ensure a smooth and orderly departure.

Scholz said nobody would have expected that it would still be unclear unclear what sort of Brexit deal there will be just two months before Britain is due to leave the bloc.

"In the end we have to find a solution," Scholz said.

Many of the banks that use as their EU hub have opened or expanded units in Frankfurt, and elsewhere to avoid disruption from any hard Brexit or limited access to the single market in future.

"It's obvious there will be a lot of business that moves to the EU," Scholz said of the financial services sector, adding that Germany was prepared for a no-deal Brexit.

"Looking at the financial sector, I am absolutely sure that we will be able to manage all the questions related to that," Scholz said.

"There will be a different landscape ... There will still be business in London and it's necessary that we cooperate. We are a prepared for a hard Brexit."

(Reporting by and Jones; editing by David Evans)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, February 08 2019. 16:35 IST
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