Finance sector a ‘monster’ says ex head of IMF

by Ann Pettifor, 22nd May, 2008.

There has been much huffing and puffing in the financial media about Horst Kohler’s comments that financial markets have become “a monster” that must “be put back in its place”. The German president who was MD of the IMF from 2000-2004, compared bankers with alchemists who were responsible for “massive destruction of assets”.

In comments published in the German weekly, Stern on 15th May, 2008, Kohler said: “The only good thing about the crisis is that it must now be clear to the responsible thinkers in the sector that global financial markets have become a monster that must be tamed again…We have to hold up a mirror to the finance world. They have deeply embarrassed themselves. And I still have not heard a clearly audible mea culpa”.

“The over-complexity of financial products and the possibility of undertaking huge leverage oeprations with the smallest amount of capital as security allowed the monster to grow” Kohler told Stern.

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