US Seen Losing Financial Supremacy

"The long term consequences of the crisis are not yet clear. But one thing seems likely to me: the US will lose its superpower status in the world financial system," Steinbrueck told parliament on Thursday, September 25, reported Reuters.

"The world will never be as it was before the crisis."

A global financial firestorm swept the world earlier this month after Wall Street giant Lehman Brothers, the fourth-largest investment bank in the US, filed for bankruptcy protection.

The collapse of Lehman and financial woes of other financial institutions like insurer giant AIG knocked down global markets in a turmoil touted as the worst since the Great Depression of the 1930s.

The Bush administration is proposing a massive 700-billion-dollar rescue package to bail out the country's banking industry.

The plan would see the government buying the toxic debts until fallen market prices recover.

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