The money markets are "playing with dynamite" by driving down Deutsche Bank's share price, the chief executive of the Berlin stock exchange has warned.
Artur Fischer blamed a disconnect between perception and reality for the dramatic plunge in the bank's share value.
Asked on BBC Radio 4's World At One if the markets were playing with fire, Mr Fischer said: "Definitely. You could say playing with dynamite."
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As share prices in the troubled bank continued to tumble, Mr Fischer said: "The market bets that the German government will do a bailout even though there is no need for that at this point in time at all.
"We have a disconnect between perception and reality. Reality is what you have in the balance sheet of Deutsche ... they have three times as much capital than what the share value is, so the reality is actually much better than the perception. But the perception at the end counts, so people act on perception.
"Deutsche will have to come up with some good news. The market has to be put at ease. I'm pretty sure that in the long weekend we have ahead of us we will hear some positive news coming out of Deutsche."
Mr Fischer said German Chancellor Angela Merkel was "between a rock and a hard place" as she could not go back on her word by using taxpayers' money to bail out the banks.
The bank's shares plummeted to fresh lows on Friday as chief executive John Cryan moved to reassure investors over its health.
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Shares in the German lender slipped to 9.98 euros at one point - their lowest level since the 1980s - before settling at just above the 10 euro mark, down more than 4%.
The collapse follows reports that 10 hedge funds had reduced their exposure to the lender and have taken their business elsewhere.
The news spooked investors, who have continued a dramatic sell-off that was triggered by a proposal tabled by US authorities which could see the bank slapped with a 14 billion US dollar (£10.5 billion) bill, linked to the sale of mortgage-backed securities during the financial crisis.
Mr Cryan was forced to pen an open letter to staff, saying the news about hedge funds has sparked "unjustified concerns".
"We should consider this in the context of the bigger picture: Deutsche Bank overall has more than 20 million clients.
"I understand if you feel concerned by the extensive coverage on this issue. Our bank has become subject to speculation. Ongoing rumours are causing significant swings in our stock price.
"It is our task now to prevent distorted perception from further interrupting our daily business. Trust is the foundation of banking. Some forces in the markets are currently trying to damage this trust."
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The lender's performance dragged down other European exchanges and banking stocks, including British lenders Barclays and Royal Bank of Scotland, which were down 2.72% and 1.52% respectively.
The FTSE 100 took a pounding as a result, with the index down 53 points to 6,866.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "Deutsche Bank's woes are sending ripples through the UK stock market today, as investors worry about the capital position of Germany's largest bank. Banks and insurers dominate the fallers."
Prudential, whose asset management business M&G has a significant European customer base, was down 2.41%.
"That uncertainty has set investors fleeing to traditional safe havens, so it's no surprise to see precious metals enjoying a bounce. That has left gold and silver miners at the top of the FTES 100," he added.
Randgold was one of the biggest risers, up 1.46% with silver producer Fresnillo up 1%.
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