In what has been described as the toughest comments by a leading European politician since the start of the subprime crisis, Horst Köhler, the German president and former head of the International Monetary Fund (IMF), yesterday slammed global financial markets as “a monster” which “must be put back in its place”.
Köhler said in an interview with the German Stern magazine, to be published today, world financial markets had come close to “a collapse” and called for greater regulation in the wake of the subprime mess, according to the Financial Times.
The German president was comparing bankers with alchemists who were responsible for “massive destruction of assets” and called for the reconstruction of a “continental European banking culture”.
“The complexity of financial products and the possibility to carry out huge leveraged trades with little [of their] own capital have allowed the monster to grow…also responsible [is] the grotesquely high compensation of individual finance managers,” he said.
Further reading:
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