Steinbrück slams US for sparking global financial crisis

Steinbrück slams US for sparking global financial crisis
Photo: DPA
German Finance Minister Peer Steinbrück on Thursday slammed the United States for allowing its lax regulation to spark a worldwide financial crisis.

Speaking to parliament, Steinbrück said the United States will cease to be the economic “superpower” because of the crisis, which he blamed on Washington’s “laissez-faire” attitude.

“The USA is the root of the crisis and it is the focus of the crisis,” he said. “The long-term consequences of the crisis are not yet clear. But one thing seems likely to me: the USA will lose its superpower status in the global financial system.”

Steinbrück also said the world financial system would become multi-polar and less dependent on the United States.

“Wall Street will never be the same again. A few days ago there were two Mohicans left remaining among the investment banks. Now they no longer exist,” Steinbrück said, referring to the change in status of Goldman Sachs and Morgan Stanley into bank holding companies.

He added that stronger international regulation agreed upon at the international level was necessary to “re-civilize” financial markets so that such a crisis was never repeated.

“The world will never be the same as it was before the crisis. The whole world over we must adjust ourselves to lower rates of growth and – with a time lag – unfavourable developments on labour markets,” he said.