US `will lose financial superpower status'

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.

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"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."

The US had failed in its oversight of investment banks, Mr Steinbrück said, adding that the crisis was an indictment of the US two-tier banking system and its "weak, divided financial oversight."

He pointed the finger at Washington for failing to take seriously proposals Berlin had made as it chaired the Group of Eight industrial nations last year. These proposals, he said, "elicited mockery at best or were seen as a typical example of Germans' know-better attitude."

You go, peer!

In the long run, we're all dead. John Maynard Keynes