Bankruptcy

Predictions of a Big Bank Failure

By J. Michael McBride

Here is an article on the recent comments from Professor Kenneth Rogoff who is a former chief economist for the IMF. He predicts that there will be not only smaller banks failing in the US but also a large bank or investment bank. I do not disagree, however, another way to look at this gentleman’s comments would be to think about the fact that they are being made as indicative of a changing social mood rather than seeing them simply for what they are, an opinion of a large bank failure per se.

Quote:

Professor Kenneth Rogoff, a leading academic economist, said there was yet worse news to come from the worldwide credit crunch and financial turmoil, particularly in the United States, and that a high-profile casualty among American banks was highly likely.

“The US is not out of the woods. I think the financial crisis is at the halfway point, perhaps. I would even go further to say the worst is to come,” Prof Rogoff said at a conference in Singapore.

In an ominous warning, he added: “We’re not just going to see mid-sized banks go under in the next few months, we’re going to see a whopper, we’re going to see a big one — one of the big investment banks or big banks,” he said.

Here is a link to this article:
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4563171.ece

Michael

Full post as published by Texas Lawyer Blog on August 19, 2008 (boomark / email).