bank run blog

A former chief economist for the IMF has predicted the failure of a large US financial institution within months, the latest in a series of indications that the crisis in the financial markets has not bottomed. The Times reports :

“The deepening toll from the global financial crisis could trigger the failure of a large US bank within months, a respected former chief economist of the International Monetary Fund claimed today, fuelling another battering for banking shares.

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.”

Times : Credit crunch may take out large US bank warns former IMF chief

BBC News : US bank ‘to fail within months’