From Fortune Magazine (Hat tip Mish):
Banks don't have enough capital to fix their problems, which means the Obama administration may need a lot more money to clean up the financial mess.Thurgy: Much higher than $700B means $3T
The cost of the bank bailout is likely to be much higher than $700 billion.
While the Obama administration hasn't asked Congress for more money yet, some experts warn that government spending on support for struggling financial services companies will ultimately reach into the trillions of dollars.
"The amount of working capital you'd expect the government to take into this would be around $3 trillion to $4 trillion," said Simon Johnson, a senior fellow at the Peterson Institute for International Economics and author of its Baseline Scenario financial crisis blog.
But calls for a comprehensive response from the government have increased in recent weeks following the free fall of bank stocks.
