the visible hand

it is the theory which decides what can be observed – einstein

US ‘will lose financial superpower status’

Posted by ecoshift on September 25, 2008

FT.com / World – US ‘will lose financial superpower status’
By Bertrand Benoit in Berlin
Published: September 25 2008 11:55

The US is poised to lose its role as a global financial “superpower” in the wake of the financial crisis, Peer Steinbrück, German finance minister, said on Thursday as he called for a regulatory crackdown on financial markets.

“The US will lose its status as the superpower of the world financial system. This world will become multipolar” with the emergence of stronger, better capitalised centres in Asia and Europe, Mr Steinbrück told the German parliament.

“The world will never be the same again.”

Mr Steinbrück launched a biting attack at the US government for resisting calls for stricter regulations of financial markets even after the subprime crisis erupted last summer, for which he said Washington was partly responsible.

In language that went much further than recent comments by Angela Merkel, Germany’s chancellor, Mr Steinbrück said tougher capital market rules were an urgent necessity.

“Crisis management alone will not rebuild the lost confidence,” he said. “We must civilise financial markets, and not just through moral appeals against excess and speculation. Self-regulation is no longer sufficient.”

The US belief in “laisser-faire capitalism; the notion that markets should be as free as possible from regulation; these arguments were wrong and dangerous,” he said. “This largely under-regulated system is collapsing today.”

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