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Economist warns of big bank failure

Aug. 19, 2008 at 2:10 PM   |   Comments

SINGAPORE, Aug. 19 (UPI) -- A former International Monetary Fund chief economist said in Singapore that a large bank failing was to be expected soon.

"We're not just going to see a mid-sized bank go under in the next few months, we're going to see a whopper … one of the big investment banks or big banks," Kenneth Rogoff said in a speech Tuesday.

Rogoff, now a professor of economics at Harvard University, said the financial system "has become very bloated in size and needed to shrink," the Telegraph of London reported.

Rogoff also warned of global inflation, the Telegraph reported.

Cutting interest rates to stimulate the U.S. economy would "lead to a lot of inflation in the next few years," Rogoff said.

© 2008 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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