Markets have become a monster, German president says

May 14, 2008
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BERLIN, May 14 – German President Horst Koehler attacked banks for allowing markets to become a "monster" that nearly caused a "collapse" as a result of the US subprime crisis, according to comments published on Wednesday.

"It must by now have become clear to every responsible thinking person in the (banking) industry that the international financial markets have become a monster that has to be pushed back into the cupboard," Koehler said.

"We came close to a collapse of world financial markets," Koehler, a former head of the International Monetary Fund, told Stern magazine in an interview to be published in full on Thursday.

He said that banks have taken some responsibility for the crisis but that "a clear, audible mea culpa" is still outstanding.

He also called for greater regulation in financial markets.

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