Dr. Doom: Bank Bailout $1 Trillion Short

Thursday, January 15, 2009 2:44 PM

By: Julie Crawshaw

Economist Nouriel Roubini says the taxpayer-funded Wall Street bailout known as TARP falls $1 trillion short.

"Even if you use all of the rest of the TARP money — $350 billion — to recapitalize banks, we're going to need another trillion to bring capital bank to where banks can start lending again," Roubini told CNBC.

Government intervention has reduced the risk of a total systemic financial meltdown, Roubini says.

But since the capital of U.S. banks and brokers is less than $1.5 trillion, the system is still insolvent.

Bank of America is asking Treasury for more money, Citigroup is in trouble, and many regional banks are insolvent, Roubini notes.

“We have now a synchronized global recession,â€