GERMANY'S largest bank has ADMITTED it is in "financial repression mode" as it desperately scrambles to implement financial buffers to prevent collapse. Central banks are using interest-rate cuts, asset purchases, and other monetary-policy measures to prop up the economy to keep it at a "status quo”, the bank said. But a market correction could be on the cards if an "external economic shock" hits, they said. The news comes as it was revealed the bank's profits dropped by 98 per cent last month and its share price reached lows not seen since before 2002. Now Dominic Konstam, Deutsche Bank's global head of interest rates research, has issued a report that warned a "collapse in risk assets" could cause "panic".And he said the bank is awaiting on decisions from the ECB to bail out Italy and Japan's proposed "helicopter money" investment similar to that of quantitative easing in order to fully understand what happens next. Mr Konstam said: "The status quo could continue for several years yet – if nothing 'breaks' in the system. "There are ways of course for either avoiding breaks or at least patching them – mitigating the impact of negative rates on banks is now in vogue with subsidised bank loans for on lending. "We may yet see soft forms of bank bailout still being allowed. "The conclusion is that without an external economic shock it is hard to see policymakers being prepared to take dramatic, fiscal action to jumpstart the global economy and bounce it out of a financial repression. "Ironically the shock that is needed would require a collapse in risk assets for policymakers to then really panic and attempt dramatic fiscal stimulus." Deutsche Bank has been calling for aggressive fiscal policy, including government spending to build infrastructure to aid jobs growth in recent weeks. But Mr Konstam added: "Despite optimism around this in early July we have not exactly had the green light on either helicopter money in Japan or Italian bank bailout. "Policymakers aren’t used to dealing with financial repression and that unfortunately is one of the defining characteristics of stagnation." In July the bank's CEO John Cryan says the bank is preparing for restructuring amid concerns with its assets. He said: "If the current weak economic environment persists, we will need to be yet more ambitious in the timing and intensity of our restructuring." The bank has been trying to sell off a stake in China’s Huaxia Bank as it continues to ditch assets. It is proposing to confirm the transaction in the second half of this year. It has also announced it will reduce dividend payments to shareholders.