Financial markets are really out of control and there is an urgent need for effective regulation, German Finance Minister Wolfgang Schauble said in an interview to the Financial Times newspaper.
"I'm convinced the markets are really out of control," Schauble said in the interview published on Thursday. "That is why we need really effective regulation, in the sense of creating a properly functioning market mechanism."
Markets would not function properly if the risks and rewards are "completely unbalanced", the minister said. He also pointed out the need for transparency and standardization of products. "We need transparency for all market participants," he said.
Further, Schauble said over-the counter transactions must be regulated and attention must be paid to the ratio of financial transactions to the real exchange of goods and services. "They bear no relationship to each other," the minister said.
"We need new financial instruments to cope with the huge financial tasks that we face," Schauble said. "But, forgive my saying so, minimum profits of 25 per cent are simply unimaginable in the real economy. It isn't healthy."
According to the German finance minister, it is "very likely" that there would be no agreement on the adoption of a global financial transaction tax at the G20 summit in Canada in June. However, efforts would be made to see if such a tax can be implemented at a European level, he told the daily.
Late Tuesday, Germany's financial regulator BaFin banned short selling of debt securities by euro zone countries as well as shares of 10 large German financial institutions and insurance companies. Regulator also banned naked short-selling of Credit Default Swaps. The move took markets by surprise.
Germany has "a role as a locomotive", Schauble said, yet it will keep trying to reduce deficit and boost employment. Eurozone members with largest budget and trade deficits need more fundamental structural reforms to make themselves more competitive, he said. "Spain, for example, must solve its labor market problem."
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May 08, 2026 15:50 ET Manufacturing and services sector survey results and labor market data from main economies were the highlight on the economics news front this week. Factory orders and jobs report dominated the news flow in the U.S. Similarly, industrial production data from German garnered attention in Europe. In Asia, purchasing managers’ survey results from China and the central bank decision from Australia were in focus.