Reply #7: Greenspan, King see more pain for banks, U.S.

[ozymandius]

LONDON (Reuters) - Central bankers past and present warned on Tuesday of more pain to come for the U.S. economy and that banks worldwide could take several months yet to reveal their full losses from U.S. subprime mortgage lending.

Former Federal Reserve Chairman Alan Greenspan and billionaire investor George Soros said the downturn in the U.S. housing market had yet to take its full toll on growth.

Bank of England Governor Mervyn King said banks would take some considerable time to flush out total losses related to mass defaults on U.S. mortgages leant to people ill-equipped to pay.

"We have several more months to get through before the banks have revealed all the losses that have occurred, and have taken measures to finance their obligations that result from that, but we're going in the right direction," King told the BBC.

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Banks in Europe have been hit too and Britain suffered its first full-blown bank run since the 19th century in September when the Bank of England had to step in to offer Northern Rock (NRK.L) funding as "lender of last resort."

King said the decision to offer emergency funding to Northern Rock was taken because of worries over systemic risk.

http://news.yahoo.com/s/nm/20071106/bs_nm/economy_credit_dc