"European banks have suffered losses ... but all in all they are in a better state than American ones. At the same time it might be advisable for the Europeans to prepare for the worst case scenario," Strauss-Kahn told German daily Frankfurter Allgemeine Zeitung.

"We should not forget that first and foremost this is an American crisis ... Therefore the job of dealing with the crisis should be fulfilled first and foremost by the United States," he said in comments published in German.

The Frenchman, head of the IMF since past year, welcomed efforts by the US government to put together a 700-billion-dollar financial rescue package, saying it was "high time to find a solution to this systemic crisis."

"We welcome the plans in this respect. At first the American government was of the opinion it could decide on a case-by-case basis ... But then it became clear to them that that was not enough," he said.

He also said the crisis was "to a certain extent a result of the recent excesses" and that financial regulation in the United States was "not strong enough."

"Regulation in the United States has not kept up with the swift developments on the financial markets. State oversight is too fragmented. It appears that the need for reform, for a new financial architecture, was not recognised in time," he said.

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