Germany’s largest bank said on Wednesday that it would “substantially limit” bonuses for the 2016 financial year. The announcement comes after it agreed in December to pay $7.2 billion to resolve an investigation by American authorities into its sale of toxic mortgage securities, the International New York Times DealBook blog reported. Concerns about the potential size of the settlement have weighed heavily on the bank’s stock price and its reputation.

A leading German industry chief has warned the UK against expecting any softening of Berlin’s increasingly tough stance on Britain’s plans to leave the EU, the Financial Times reported. Dieter Kempf, who took over this month as president of the BDI, the German employers’ federation, told journalists on Tuesday there could be no question of Europe bowing to British demands for immigration controls, saying the EU’s four freedoms — including the freedom of movement — must not be “put into danger”.

German inflation jumped to within a whisker of the European Central Bank target in December, hitting the highest level in more than three years and providing the euro zone bank with evidence its loose monetary policy is working, Reuters reported. The surprisingly strong surge in consumer prices, however, may put a damper on Germans' appetite for shopping as higher inflation means consumers have less real income to spend.

No wonder Germany is on the warpath against a proposed global standard for how banks calculate the capital they need: Its largest lenders rank among the worst when it comes to how they assess risk. That means Deutsche Bank AG and Commerzbank AG will be affected more than most big lenders and may have to raise additional capital, if and when the Basel Committee on Banking Supervision implements a proposed floor for how much their risk-weighting of assets can veer from standardized measures.

Deutsche Bank AG employees may have manipulated internal indexes as part of an allegedly fraudulent scheme to help Banca Monte dei Paschi di Siena SpA conceal losses, according to an audit commissioned by German regulators. The study, requested by watchdog Bafin and seen by Bloomberg, says an internal Deutsche Bank review described “abnormalities” in the values of proprietary indexes used to set the price for the Monte Paschi deal in December 2008.

The German pilots union VC has announced further strikes at Lufthansa for Tuesday and Wednesday after fresh talks at the end of a four-day walkout failed to settle their long-running pay dispute, the International New York Times reported on a Reuters story. "Unfortunately the high-level talks that took place today at short notice failed to produce a result," VC board member Joerg Handwerg said in a statement on Sunday.

German economic growth slowed more than expected in the third quarter of 2016 as weaker exports put the brakes on overall activity in Europe’s largest economy, preliminary data showed on Tuesday. The German economy grew by 0.2 per cent on the quarter between July and September after it expanded by 0.4 per cent in the three months to June, the Federal Statistics Office said. That was lower than the consensus forecast in a Reuters poll for 0.3 per cent growth.

Deutsche Bank AG Chief Executive Officer John Cryan’s troubles range from the company’s mounting legal costs to stricter regulation that’s eroding returns. And there’s at least one challenge he shares with his German rivals: Europe’s most competitive market. “Deutsche Bank still has a lot to deal with, but the German market as a whole is pretty rotten,” said Martin Wilhelm, founder of IfK GmbH, which manages more than 600 million euros ($650 million) of fixed-income securities in Kiel, Germany.

Germany’s pension insolvency vehicle, the Pensions-Sicherungs-Verein (PSVaG), has for the first time since its inception in 1975 set the contribution rate for companies to 0 per thousand. Because so few insolvencies were reported this year, the PSVaG will not have to take on pension liabilities from companies in financial trouble. The PSVaG also waived its right to set advance payments for 2017 but added that it would review this decision early next year.

German chemicals manufacturer BASF has been accused of avoiding close to €1 billion of tax. In a report published on Monday, the company is alleged to have used aggressive tax-planning strategies in the Netherlands, Belgium, Switzerland and Malta to reduce its tax burden, the Irish Times reported.