Dominique Strauss-Kahn is not in a position to run the International Monetary Fund after his arrest over an alleged sexual assault, US Treasury Secretary Timothy Geithner has said. He added IMF's executive board should designate an interim head.
The alleged assault on a maid happened at New York's luxury Sofitel hotel on 14 May.
Mr Strauss-Kahn - who denies the claims - has been put on suicide watch in the city's infamous Rikers Island prison. As a precaution, guards are required to check on him every 15 to 30 minutes.
The 62-year-old, who had been seen as a favourite in France's 2012 presidential elections, faces seven charges and could be sentenced to up to 25 years in jail.
The defence offered to post $1m bail, with Mr Strauss-Kahn to stay at his daughter's address in New York until the next hearing on Friday. However, a New York judge rejected the application.
Addressing the Harvard Club in New York on Tuesday, Mr Geithner said the most important thing for the IMF was that it found a leader to fill Mr Strauss-Kahn's shoes.
He is obviously not in a position to run the IMF, Mr Geithner said.
It is important that the board of the IMF formally put in place for an interim period someone to act as managing director.
It is the first time that a top official from President Barack Obama's administration has publicly spoken about the impact of Mr Strauss-Kahn's alleged sexual assault. However, Mr Geithner refused to comment on the case or the details of the charges against Mr Strauss-Kahn.
Since Mr Strauss-Kahn's arrest last Saturday, his deputy John Lipsky has been serving as acting managing director of the global lending agency. Washington has a major say in determining who runs the IMF, because it has the largest number of votes in the organisation.
Mr Strauss-Kahn is not due back in court until Friday - and there are growing calls for the IMF to fill the leadership vacuum, the BBC's Steve Kingstone in Washington reports. Earlier, Austrian Finance Minister said Mr Strauss-Kahn was hurting the organisation.
Until he was arrested, Mr Strauss-Kahn was considered a favourite to become the Socialist candidate for the French presidency next year. Opinion polls gave him a good chance of defeating President Nicolas Sarkozy.
Mr Strauss-Kahn's wife, French TV personality Anne Sinclair, has also protested his innocence. Meanwhile, another allegation against Mr Strauss-Kahn has emerged. French writer Tristane Banon, 31, says she may file a complaint for an alleged sexual assault in 2002.