German and European bank regulators have objected to a merger of Germany’s two biggest lenders, Deutsche and Commerzbank, while European Bank regulators have voiced their opposition due to Commerzbank inability to help the troubled Deutsche Bank recover from both its financial and legal woes.

Moreover, European regulators would favour a cross-border merger rather an all-German deal, according to reports from Bloomberg. Germany’s main industry regulator (BaFin), has also come out against a potential merger, according to those familiar with the deal.

Deutsche Bank lost 47% of its value over the last year. Since 2014, the lender has lost over 80% of its value in the last five years as Deutsche is linked to a multi-billion-euro money-laundry scheme carried out by its Copenhagen-based branch, Danske Bank.

The ailing lender needs support and the German government is considering the idea of a “banking champion” with €2 trillion in total assets. There have been intense consultations between the government and two lenders, but according to the Financial Times the government is not guiding the process and the decision ultimately rests with the two lenders and the German regulator.

The systemic question is whether further consolidation of the banking system will help the stability of the banking system or put the German financial system in further systemic jeopardy.