Large U.S. Banks May Fail Amid Recession...

Large U.S. Banks May Fail Amid Recession, Rogoff Says (Update3)

Aug. 19 (Bloomberg) -- Credit market turmoil has driven the U.S. into a recession and may topple some of the nation's biggest banks, said Kenneth Rogoff, former chief economist at the International Monetary Fund.
``The worst is yet to come in the U.S.,'' Rogoff, a Harvard University professor of economics, said in an interview in Singapore today.
``The financial sector needs to shrink; I don't think simply having a couple of medium-sized banks and a couple of small banks going under is going to do the job.''
``The only way to put discipline into the system is to allow some companies to go bust,'' Rogoff said. ``You can't just have an industry where they make giant profits or they get bailed out.''.....

Bloomberg.com: Worldwide

 

Tropo

Ok having the gov. bail them out perhaps is not ideal
but letting them go bust is not good either.

If you compare the US with Aust. here we have less competition
and the banks are also making giant profits.

And if those profits were not enough they want more..., the RBA will soon be lowering rates and the lenders are not interested in passing it on.
They want to boost their giant profits at our expense.

Cheers

 

"Ok having the gov. bail them out perhaps is not ideal
but letting them go bust is not good either."

BV

So, what is the other option?
I would say ... cut them short!