"We're going to see a whopper, we're going to
see a big one -- one of the big investment banks or big banks," the
paper quoted him from a conference in Singapore.
Rogoff's crystal ball
conflicts with statements of U.S. banking regulators, who have
maintained that most U.S. banks, including all the major ones, are
well-capitalized and do not post a risk of failure.
Who's right? Hard
to say. Bank regulators have extensive information on every bank in the
system and should be aware of the financial condition of each. That
said, July's failure of IndyMac surprised regulators, proving they can be
caught off guard again.
One thing is certain: if a major commercial
bank fails, the industry's deposit insurance fund will have to be
bailed out by U.S. taxpayers. The $53 billion insurance fund is not
large enough absorb a major bank failure and the banking industry as a
whole is not healthy enough to cover the shortfall. - Bill McConnell
Harvard economics professor Kenneth Rogoff, former chief economist of
the International Monetary Fund, predicted Tuesday that a high-profile
casualty among American banks was highly likely, 
