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Shockwaves Continue Through Financial World Over Strauss-Kahn Arrest

May 18, 2011 at 12:00 AM EDT

GWEN IFILL: Now, to the latest on the arrest of the head of the IMF and the reaction here and in France.

Dominique Strauss-Kahn sits alone in a cell, separated from other inmates at New York City’s notorious Rikers Island jail.The 62-year old International Monetary Fund chief stands accused of grave sexual offenses and is now being guarded against harming himself.

NORMAN SEABROOK, Rikers Island correctional officer:He is in protective custody.He has a suicide watch on him done by a mental health evaluator.

GWEN IFILL: Strauss-Kahn’s status as a titan of global finance and a top contender for the French presidency is in tatters.Denied bail Monday, he awaits another scheduled hearing on charges including attempted rape and sexual assault.

It all stems from an incident Saturday at this upscale Manhattan hotel.Prosecutors allege that a naked Strauss-Kahn forced himself on a maid on her cleaning rounds who entered his $3,000-a-night suite, thinking it empty.

Strauss-Kahn’s attorney, Been Brafman, suggested at a bail hearing Monday that the encounter was consensual.

BENJAMIN BRAFMAN, attorney for Dominique Strauss-Kahn:Forensic evidence, we believe, will not be consistent with a forcible encounter.

GWEN IFILL: But Jeffrey Shapiro, the attorney for the 32-year-old maid, says that claim is false.

JEFFREY SHAPIRO, attorney:There is no way in which there is any aspect of this event which could be construed consensual in any manner.This is nothing other than a physical sexual assault by this man on — on this young woman.

GWEN IFILL: Shockwaves continue to reverberate throughout the financial world.Last night, Treasury Secretary Tim Geithner said Strauss-Kahn should be replaced.

TREASURY SECRETARY TIMOTHY GEITHNER: He is obviously not in a position to run the IMF. And I think it’s important that the board of the IMF formally put in place for an interim period somebody to act as managing director.

GWEN IFILL: But who would replace him?The IMF is traditionally headed by a European, though many emerging economies believe they should be in line for the post.Strauss-Kahn was supposed to be in Brussels today, where European finance ministers are meeting to tackle continuing threats to the Eurozone economies.

Many participants there avoided talking about the cloud his absence cast.

OLLI REHN, European commissioner for economic affairs: I have no comment on that. The investigation is going on.

GWEN IFILL: But not all.

ELENA SALGADO, Spanish finance minister (through translator):If I had to show my solidarity and support for someone, it would be towards the woman who has been assaulted, if that is really the case that she has been.

GWEN IFILL: In France, there is widespread sympathy for the man they call DSK, who was already a leading contender in next year’s presidential election.

Even political rival Segolene Royal, the Socialist candidate for president in 2007, defended him.

SEGOLENE ROYAL, former French presidential candidate (through translator):We have seen the images of a man looking as if he has already been convicted.These images are extremely violent and painful.I think that we should respect Dominique’s human dignity, respect the suffering of his loved ones.

GWEN IFILL: Additional fuel was added to the firestorm today, as another claim emerged, this time in Mexico, that Strauss-Kahn assaulted a hotel maid there, adding that accusation to those of a French novelist, and the maid, who testified today in secret before a New York grand jury.