German Finance Minister Peer Steinbrueck said on Thursday the serious global financial crisis would deeply transform the global financial system with the United States likely to lose its financial superpower status.
"The world will not be the same as before the crisis ... One thing seems probable to me: The United States will lose its status as the superpower of the global financial system. The global financial system will become multipolar," said Steinbrueck in a speech to German lawmakers.
He predicted that state funds and banks from Asia, the Middle East as well as Europe with a universal banking model will play bigger role in the new global financial markets.
After meeting his French counterpart Christine Lagarde later on Thursday, Steinbrueck also forecast that there would be four major currencies in future world with the U.S. dollar retaining its roleas a lead currency but euro, yen and Chinese yuan expected to gain in influence.
According to Lagarde, France and Germany have discussed what could be done short-term to curb the current financial crisis. Shenamed their moves to stop short selling of financial stocks as an example.
In the speech to the German lawmakers, Steinbrueck called for more internationally coordinated regulations to prevent future crises.
He sharply criticized what he called "irresponsible overemphasis" of the "laissez-faire" principle of the Anglo-Saxon banking model, which he said was obsessed on returns.
"The German banking system has proved to be relatively robust in international comparison," Steinbrueck said.
With a view to the future, he noted that just to overcome the crisis and then return to business as usual would not be enough." It's necessary to re-civilize the financial markets and make best possible efforts to help prevent similar crises in the future."
"For me the important answer is stronger, internationally coordinated regulation at the international level because the crisis goes beyond measures that can be taken by nation states," Steinbrueck said.
He proposed an eight-point plan to address the crisis, including larger capital reserve requirements for banks to offset credit risks, an international ban on purely speculative short-selling and strengthening market supervision in Europe.