NYU Prof: Cost of Credit Crisis Will Top $2T

By the end of next year, financial institutions will be looking at $2 trillion in writedowns due to the current credit crisis, according to an economics professor at New York University. Speaking on CNBC Monday morning, Nouriel Roubini of NYU's Stern School of Business said the $2 trillion price tag includes not only subprime loans, but "A paper" mortgages, credit cards, auto loans, municipal bonds, and other asset categories. "The consumer is on the ropes," said Professor Roubini. "Banks have barely started [taking writedowns]," he said. To date, Wall Street firms, banks, and other financial institutions have suffered mortgage-related asset writedowns of more than $300 billion. He predicted that the Federal Deposit Insurance Corp. will have to "bail out hundreds of banks."