Germany will not grant any more state aid for ailing banks, a senior parliamentarian in Chancellor Angela Merkel's conservative bloc said on Thursday, a day after the government denied it was working on a rescue plan for Deutsche Bank, its biggest lender.

Deutsche is disputing a fine of up to $14 billion (€12.48 billion) from the US department of justice. Concern about the bank’s financial health sent its shares to a record low on Tuesday.

Referring to the state rescue of banks on the brink of collapse after the 2008 global financial crisis, Hans Michelbach, a financial expert in Bavaria's Christian Social Union (CSU), told Deutschlandfunk radio: "I cannot imagine that the state will repeat something like that."

Rescue plan

The German finance ministry on Wednesday brushed off a report that a rescue plan was being prepared in case Deutsche was unable to raise capital to pay legal bills.

Mr Michelbach, and head of the conservatives in the parliamentary financial committee, also reiterated his criticism of the European Central Bank's low interest rates policy and bond-buying programme after ECB president Mario Draghi came to Berlin to address a group of parliamentarians.

Mr Draghi meets Dr Merkel later on Thursday.

“The policy has failed,” Mr Michelbach said, noting that Mr Draghi had given no signal when and how the policy of low interest rates would come to an end. He said cheap money was stopping countries from implementing reforms.

“We want, quite clearly, to end the low interest rate phase,” he said. – (Reuters)