GERMANY'S PRESIDENT, Horst Köhler, who was formerly head of the International Monetary Fund (IMF), has said the recent credit crunch shows that the world financial markets have turned into an uncontrollable "monster".
Mr Köhler attacked highly-paid fund managers who "barely understood" the complexity of the leverage instruments which had "very nearly caused the collapse of the world finance markets".
"The international finance market has turned into a monster that must be put in its place," said Mr Köhler, a former adviser to Chancellor Kohl, in an article in Stern magazine.
Along with the US and Britain, Germany was badly hit by the sub-prime credit crisis last year, with two state-owned banks only narrowly avoiding collapse.
Mr Köhler suggested that the blame lay with "bizarrely well-paid" financial managers who had no idea what they were doing. "The possibility to set huge leverage deals in motion with only a small amount of capital has let the monster grow," he said. "There is barely a connection to the real-world economy any more."
The finance sector had made a "huge blunder" over the sub-prime crisis, he said, but it had "yet to make a clear mea culpa".
Mr Köhler, a trained economist, served as president of the German Savings Bank Association before heading the IMF. He called for that organisation to be given greater powers to monitor financial systems.
The German president said that he would welcome "stricter and more efficient regulation" of transactions and an increase in capital requirements for complex transactions.
