• Germany's news in English

Steinbrück accuses UK of 'having problems' with financial reform

AFP · 23 Sep 2009, 13:44

Published: 23 Sep 2009 13:44 GMT+02:00

Facebook Twitter Google+ reddit

"There is clearly a lobby in London that wants to defend its competitive advantage tooth and nail," Steinbrück told German magazine Stern in an interview to appear on Thursday.

Such a lobby could seek to influence Britain's position at the G20 summit, where global leaders are to discuss financial sector regulation and the outlook for recovery from the deepest recession since the 1930s.

Around 15 percent of Britain's gross domestic product is generated by its financial services industry based in the city of London, compared with six percent in Germany.

“Light touch regulation” was the rallying call of the past decade in the financial markets, with London and New York emerging as the most important centres handling trillions of dollars but the global crisis and its cost to the taxpayer has sparked a radical change in view.

Regulation of speculative hedge funds accused of fuelling the global financial crisis is an issue with which "the British have problems and that is putting it mildly," Steinbrück said.

On Tuesday, French Finance Minister Christine Lagarde said that financial centres in the United States and Britain were putting up "resistance" to proposed regulations of the sector.

But Steinbrück expressed optimism that progress would be made in curbing the excesses that fuelled the global financial crisis.

"Politics is sometimes like a locomotive that gets started slowly" before picking up more and more supporters, he said. "We are going to durably change the rules of the game on financial markets," the finance minister pledged, adding that he did not want a repeat of the past year which was marked by the collapse of US investment bank Lehman Brothers.

Meanwhile, the financial director of Germany's leading airline Lufthansa expressed concern that regulation of financial derivative products would force the carrier to tie up large amounts of badly-needed cash for its operations.

Stephan Gemkow told financial daily Börsen Zeitung that derivatives allow Lufthansa to hedge against fuel costs or cover long-term investments such as the purchase of airplanes.

Story continues below…

"We would have to set aside billions of euros in cash for years" if the carrier is not able to use such complex financial products, he said.

Derivatives are financial instruments designed to manage risk and return, and are widely used by large companies in the management of their operations.

But derivatives have also been singled out as an aggravating factor in the global financial crisis because they can be highly speculative investment instruments based on very high levels of gearing to the underlying asset.

Several European governments want derivatives and their markets subjected to much greater regulation to minimise risks.

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Outrage over ruling on 'brutal' gang rape of teen girl
The now convicted suspects, sitting in court in Hamburg. Photo: DPA.

A 14-year-old girl was gang-raped and left partially clothed and unconscious in freezing temperatures. Now prosecutors are appealing the sentences for the young men found guilty, most of whom will not set foot in jail.

Dozens of Turkish diplomats apply for asylum in Germany
Demonstrators holding a giant Turkish flag protest against the attempted coup in Istanbul in July. Photo: DPA.

Since the failed putsch attempt in Turkey in July, Germany has received 35 asylum applications from people with Turkish diplomatic passports, the Interior Ministry confirmed on Wednesday.

Hertha Berlin fan club criticised for 'anti-gay banner'
Hertha BSC beat FC Cologne 2-1. Photo: DPA

A 50 metre fan banner apparently mocking the idea of gay adoption has overshadowed Hertha BSC's win in the Bundesliga.

Germany stalls Chinese takeover of tech firm Aixtron
Aixtron headquarters in Herzogenrath. Photo: DPA

The German government on Monday said it had withdrawn approval for a Chinese firm to acquire Aixtron, a supplier to the semiconductor industry, amid growing unease over Chinese investment in German companies.

Politicians call for tough sentences for 'killer clowns'
File photo: DPA.

Now that the so-called 'killer clown' craze has spread from the US to Germany, elected officials are drawing a hard line against such "pranks", with some threatening offenders with jail time of up to a year.

Nearly one in ten Germans are severely disabled
Photo: DPA

New figures reveal that 9.3 percent of the German population last year were considered severely disabled.

The Local List
Germany's top 10 most surreal sites to visit
The Upside-Down House, in Mecklenburg–Western Pomerania. Photo: Olaf Meister / Wikimedia Commons

From upside-down houses on Baltic islands to a fairy-tale castle near the Austrian border, Germany is a treasure trove of the extraordinary.

Bavarian critics back Merkel for Chancellor again
Photo: DPA

The Christian Social Union (CSU) have long delayed backing Angela Merkel as their candidate for Chancellor in next year's general election. But now key leaders are supporting her publicly.

Four taken to hospital after hotel toilet bursts into flames
File photo: DPA.

Four guests at a Nuremberg hotel were taken to hospital due to smoke inhalation early Monday morning after a toilet there burst into flames.

Creepy clown scare spreads to Germany
Two of the clowns were apparently equipped with chainsaws. Photo: Pedro Pardo / AFP file picture

Police said Friday five incidents involving so-called scary clowns had occurred in two north German towns, including one assailant who hit a man with a baseball bat, amid fears that Halloween could spark a rash of similar attacks.

10 things you never knew about socialist East Germany
Sponsored Article
Last chance to vote absentee in the US elections
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd