Monday, August 18, 2008

"A Thousand Banks Could Fail"

Billionaire vulture investor Wilbur Ross this morning told CNBC's "Squawk Box" that a thousand banks could fail before the financial crisis is over.

"Not very big ones necessarily," he said. "But a thousand banks is going to be a lot."

A thousand banks will mean billions upon billions in losses

And the impact on the credit crunch could be severe.

"Each dollar of bank equity that gets lost takes out about 12 or 13 dollars of loans so there's a tremendous magnifier effect of small changes in bank equity," Ross emphasised.

Do we need to emphasise that no one should have more than the maximum FDIC insured amount of $100,000 at any one bank?

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