Anshu Jain predicts bleak outlook

Source: Exec Digital USA

Date :7/3/2008 6:42:01 AM

Deutsche Bank AG’s head of global markets warns that the subprime crisis isn’t over.

Speaking at a Euromoney conference in London, Jain compared the crisis to the impact of Hurricane Andrew, the September 11 attacks and Hurricane Katrina, combined.

“This banks crisis is really at a point where it equals the three biggest crises faced by the insurance industry,” he said.

The crisis has already erased more than a fifth of the banking industry’s value.

Jain declined to predict when the crisis will end.

“Banks continue to need and raise equity capital, and the proportion of equity capital which is required is directly driven by the further drop in assets they own,'' he said.

“One of the assets which continues to be in free fall is US house prices.''

He said that if the US house prices stopped dropping for two to three months, then “very quickly we will start to find the bottom to the current crisis”.