It means the banking system has high risk and if you are a holder of cash it is cheaper and safer to give it to the government of germany than to put it in a safe deposit box at a bank, or worse deposit it with a bank.
Think of it another way if you had 500 million dollars where would you put it? A normal bank account only insures up to maybe 100 or 200k dollars. You would need like 500 bank accounts at different banks to insure all that money. Or you could drop the whole sum off with the German government and take a small loss. But you would have the full backing of a major economic power.
You can certainly drop the whole thing off at Charles Schwab. But if anything happens to Charles Schwab there goes your money. So it's all about how much risk do you want to take?
Your theory/explanation was very helpful.