Thursday, Sept 25, 2008
Germany blamed the United States on Thursday for spawning the global financial crisis with a blind drive for higher profits and said it would now have to accept greater market regulation and a loss of its financial superpower status.
In some of the toughest language since the crisis worsened earlier this month, German Finance Minister Peer Steinbrueck told parliament the financial turmoil would leave “deep marks” but was primarily an American problem.
“The world will never be as it was before the crisis,” Steinbrueck, a deputy leader of the centre-left Social Democrats, told the Bundestag lower house.
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“The United States will lose its superpower status in the world financial system. The world financial system will become more multi-polar.”
Steinbrueck, whose efforts to secure greater transparency on hedge funds during Germany’s G8 presidency last year collapsed amid objections from Washington and London, attacked what he called an Anglo-Saxon drive for double-digit profits and massive bonuses for bankers and company executives.
“Investment bankers and politicians in New York, Washington and London were not willing to give these up,” he said.
He proposed eight measures to address the crisis, including an international ban on “purely speculative” short-selling and an increase in capital requirements for banks in order to offset credit risks.
The collapse of U.S. investment bank Lehman Brothers and financial woes of other financial institutions like insurer AIG have prompted the U.S. government to propose a $700 billion rescue package for the country’s financial sector.