Global financial markets have become “a monster” that “must be put back in its place”, the German president has said, comparing bankers with alchemists who were responsible for “massive destruction of assets”.

In some of the toughest comments by a leading European politician since the start of the subprime crisis , Horst Köhler – a former head of the International Monetary Fund – called for tougher regulations and the reconstruction of a “continental European banking culture”.