Tags: german | finance | minister

German Finance Chief: U.S. to Blame for Economic Crisis

Monday, 29 Sep 2008 05:44 PM

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Germany’s finance minister, Peer Steinbrück, says the United States clearly bears much of the responsibility for the mammoth, global credit crisis.

“The source and focus of the problems are clearly in the United States,” he told Spiegel magazine.

“There are many causes. After 9/11, a great deal of cheap money was tossed into the market. Apparently some of that money went to people with poor creditworthiness. This led to the growth of the real estate bubble,” Steinbrück said.

“The banks embarked on a race over profit margins. Then speculation spun completely out of control…”

Steinbrück went on to say that the current financial mess is clearly the worst in decades, although he stopped short of comparing it to 1929 and the ensuing Great Depression.

“One thing is clear: After this crisis, the world will no longer be the same. The financial architecture will change globally,” Steinbrück said. “There will be shifts in terms of the importance and status of New York and London as the two main financial centers.”

“State-owned banks and funds, as well as commercial banks from Europe, China, Russia and the Arab world will close the gaps, creating new centers of power in the financial world.”

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