Well, that is really stating the obvious, but a former IMF chief has more clout than the rest of us.
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4563171.eceGary Duncan, Economics Editor and Leo Lewis, Asia Business Correspondent
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.
Investment banks are the banks that underwrite new stock issues and new bond issues. They are large, politically extremely influential, and usually highly profitable. Eventually though they started getting so big and bureaucratic that they were "swallowing their own poison".
The ones whose names keep popping up as being in trouble are Citigroup, Banc of America Securities, Wachovia, and USB. USB is a Swiss bank where reputedly NWOish principals tend to bank. All of the preceding are investment banks associated with commercial banking. Merrill Lynch and Lehman Bros are two more reputedly in trouble, that are not associated with commercial banking.
The big commercial bank that is probably being referred to as being in trouble is mine, Washington Mutual, which was a major player in the mortgage business, particularly in California, and holds a lot of mortgage-related investments on its own account (most banks sell loans they originate).
Indymac was not a particularly large bank, and it took out 10% of the FDIC's reserves. A few smaller banks that failed recently took out a few percent more reserves. The failure of a big commercial bank will probably wipe out its fund. I would seriously consider starting a run on the banks at that point, because it will take a while for the FDIC's increased premiums to replenish its pool.
