European Commission Vice President Valdis Dombrovskis said on Wednesday the noise centered around Deutsche Bank's current affairs is somewhat exaggerated, and the European financial system is more robust than before the global 2008 crisis.

Dombrovskis, who is also a former prime minster of Latvia, said on "Squawk on the Street" the financial system is in better shape in part from the results of a recent stress test by the European Banking Authority.

"The scenarios are sent by European Banking Authority, but it must be said, even taking into account a Brexit," he said. "The adverse scenario, which banks have to go through, was more severe than volatility we had seen post-Brexit."

He continued, "Obviously, some pockets of weakness remain on which we still need to work."

Fear circulated in the European Banking community last week after a report said Deutsche Bank has still yet to reach a settlement with the U.S. Department of Justice.

There are concerns the German lender cannot afford the Justice Department's proposed $14 billion bill and would need a rescue from the German government. But Dombrovskis said the settlement results remain to be seen.

"We cannot comment [on] U.S. authorities decisions. And, as we know, negotiations between Deutsche [Bank] and U.S. authorities are still ongoing and it remains to be seen what amount of settlement it will be," he said.

Correction: This story was corrected to reflect that Dombrovskis is the former prime minister of Latvia.