…is the world’s banking system strong enough to withstand the forces of a global recession? A number of prominent people – more on them below – are dubious that the banking system is as strong as it should be. They believe that “systemic risk” – defined as the risk that most of the financial system will fail together – is on the upswing again…
One Nobel Prize winner – economist Robert Engle- has some pretty chilling predictions on just how much money it would take us to bail out a struggling financial system.
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So what would American banks need to survive another crisis? Using Engle’s calculations, it would take $513.65 billion in fresh capital for the top firms including JP Morgan, Goldman Sachs and Citigroup.