No need to panic, insists Mr Eichel

Mr Eichel's denial comes in response to mounting speculation about the stability of some of Germany's biggest banks, which have been reporting shocking results in recent weeks.

Most recently, HVB and Commerzbank, the country's second- and third-biggest finance groups, announced their first ever annual losses.

Earlier this month, Chancellor Gerhard Schroeder met top German bankers to discuss the state of the industry, a move that seems to have sparked suggestions of an imminent rescue package.

This speculation, Mr Eichel insisted, was inappropriate.

Bad idea?

Nonetheless, there is an increasingly public debate on the extent to which German banks need mending, and just how they should be helped out.

Mr Ackermann may be backing a loser

Josef Ackermann, chief executive of Deutsche Bank, has floated the idea of forming "Bad Bank", a company that will assume the bad debt of established banks, enabling them to press on unencumbered.

Such a scheme has been launched in Japan, as well as in a number of emerging markets.

The state would provide a guarantee for Bad Bank, which should then be able to find investors and focus on collecting as much of its debts as it can.

Helping themselves

According to German business daily Handelsblatt, the Ackermann plan has not found favour in Frankfurt.

Bankers there fear it would tarnish the reputation of German banks, which were once known worldwide for their unimpeachable financial solidity.

The same argument could be applied to any form of direct state bail-out.

In the meantime, most big German banks are bolstering their financial positions by trimming back - some extremely aggressively - on their non-core operations.