International Monetary Fund Managing Director Christine Lagarde said the sooner Deutsche Bank AG reaches a settlement with the U.S. Department of Justice the better, calling an accord preferable to going to court. “A bad settlement is always better than a good trial,” Lagarde told Bloomberg Television on Thursday. “We’re not in a trial mode clearly in the case of Deutsche Bank, but a settlement would certainly be welcome because it would deliver some certainty as to what weight the bank will have to carry and whether it matches with its provisions or not. So the sooner, the better.” Deutsche Bank Chief Executive Officer John Cryan last week reassured investors that he doesn’t plan to raise capital while reiterating that he expects U.S. authorities to scale back an initial request for $14 billion— or more than twice the lender’s provisions—to settle a probe tied to residential mortgage-backed securities. The request sparked concern among investors that the lender will have to raise money to weather mounting legal costs. The shares were down 0.4 percent at 12.03 euros at 4:55 p.m. in Frankfurt. They have dropped about 47 percent this year, making them the third-worst performers on the 38-member Bloomberg Europe Banks and Financial Services Index, which has slipped 21 percent. The Justice Department, in concluding previous investigations into mortgage businesses after the financial crisis, has typically presented initial penalties above what lenders ultimately paid, people with knowledge of the negotiations have said. The latest to settle were Morgan Stanley, which agreed to a $2.6 billion settlement in February, and Goldman Sachs Group Inc, which accepted a $5.1 billion deal two months later. Cryan and other top German executives are scheduled to travel to Washington this week as business leaders and central bankers gather for IMF and World Bank meetings, according to people familiar with the matter. The managers may also use the trip to continue negotiations with the Justice Department to settle the investigation, they said. Job Cuts Since taking over last year, Cryan has suspended dividends, eliminated thousands of jobs and cut risky assets to shore up capital and profitability, battered by tougher capital rules and volatile markets. The lender said on Thursday it reached an agreement with labor representatives to eliminate 1,000 jobs in Germany as part of plans to cut 4,000 positions in its home market. The comments come a day after Peter Dattels, the IMF’s deputy director of monetary and capital markets, said that the German bank needs to address issues “of operational risk arising from litigation.” Lagarde said that Deutsche Bank and other lenders should assess the way they operate in an environment of record-low interest rates. “Deutsche Bank, like many other banks, has to look at its business model, which I’m sure it does because it’s in the process of selling assets here and there,” she said. “It has to look at its long-term profitability, given the lower-bound interest rates we have around the world and probably for longer than many expect, and decide what size it wants to have and how it wants to strengthen its whole balance sheet.”