Germany's finance ministry has officially denied a report in German weekly Die Zeit that it is preparing an emergency rescue plan for an under-fire Deutsche Bank.

Ministry spokesman Martin Jäger said at a press conference in Berlin this morning:

"The German government is not preparing a rescue plan, and there is no reason for such speculations."

He declined to comment on whether meetings had taken place to discuss Deutsche's current woes.

Europe's biggest bank has been ordered to pay $14 billion by the US Justice Department to settle allegations of mis-selling mortgage securities in the country between 2005 and 2007.

The settlement claim was three times higher than expected. Although it is just an opening bid, any final settlement of more than $4bn could threaten the lender's financial reserves.

The International Monetary Fund called Deutsche "the world's riskiest bank" in June.

Die Zeit had speculated that Angela Merkel's government is preparing a two-stage plan for the "worst-case scenario" with regard to the US case. This would initially involve the bank selling parts of its business with state guarantees for potential losses. Should the proposed private solution fail, there would then be a state-sponsored bailout which would see the government take over as much as 25% of the bank.

Deutsche's CEO John Cryan told Bild on Tuesday that such a bailout was "out of the question" as he made the case that the bank meets all regulatory capital requirements and is comfortably equipped with free liquidity.

"At no point did I ask the chancellor for support," he said. "Neither did I suggest anything like that."

Elsewhere, European Central Bank (ECB) president Mario Draghi has defended the ECB's policies in front of the German parliament.

Responding to accusations that the ECB's negative rate policy was at least partially to blame for Deutsche's troubles, Draghi said:

"We should also consider the full effect of low interest rates on banks. Those who blame ECB policy for the mixed performance of certain German financial firms have been very vocal. But what has been forgotten is that many banks have been able to more than offset declining interest revenues with higher lending volumes, improved loan performance and lower interest expenses, all of which are beneficial to both the banks and their customers.

"The ECB’s monetary policy is not the main factor for the low profitability of banks. While some banks’ business models may indeed need to adapt to the current low interest rate environment, they also need to address their own structural issues, such as overcapacity, the stock of non-performing loans and the potential impact of technological innovation.

"Low profitability is closely linked to low operational efficiency. In Germany cost to income ratios are on average relatively high compared to other jurisdictions. Let us be clear, however, there is no one size fits all banking model and we have different types of banks that are successfully operating in Germany and in the euro area."