Jan 21, 2008

Credit contraction's impact on economy, Davos 2008

The big question is how deep the losses in the banking sector will be. They will be at least $300 billion to $400 billion, which would be a moderate crisis. But if house prices continue to drop, we could see two or three times those losses, and it will one of the bigger financial crises.

~ Kenneth Rogoff, Former IMF chief economist, "Trichet, Summers See Less Optimism After Complacency", Bloomberg, January 21, 2008

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