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More Financial Institutions Set to Fail, Norton Rose Poll Finds October 6, 2008

Posted by frewon9 in News.
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By Shelley Smith

Oct. 6 (Bloomberg) — More financial institutions are set to fail, according to poll by Norton Rose LLP.

More than 79 percent of 195 respondents from financial institutions and other corporate entities said they expect more banks to fail, according to the poll.

Norton Rose conducted the survey from Sept. 16, the day after Lehman Brothers Holdings Inc. filed for bankruptcy, and Sept. 25, the day before regulators seized Washington Mutual Inc. and sold it to JPMorgan Chase & Co.

“What started as a liquidity problem arising from writedowns of mortgage-backed securities has been transformed into a much more serious financial problem,” said Stephen Parish, global head of banking at Norton Rose in London. “Intensive efforts are being made to rescue and reform financial institutions; many are questioning the viability of their business models.”

At least 75 percent of respondents said it would take between one and five years for the effects of the credit crisis to go away and 17 percent said they expected the effects to be permanent, according to the poll.

The survey was conducted online and respondents were able to remain anonymous, Norton Rose said in its report of the poll. No margin of error was provided.

To contact the reporter on this story: Shelley Smith in London at ssmith118@bloomberg.net



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