Rogoff is right - this crisis is nowhere near over yet

Kenneth Rogoff's warning, while stark, will not be new to regulators in the UK. In private chats these past few weeks, they have also been expressing increasing alarm that "a big one" is destined to fall.

It's not a British bank - ours have taken a fearful battering but they're still standing. No, all the attention - and fear - is centred on a bank in the US, a household name whose collapse would send tremors across America and the financial world.

So far, in the US, Bear Stearns is the biggest casualty of the subprime disaster and subsequent credit crunch. But Bear, while well-known, was a relatively bit player. When its problems became known, the authorities mounted an emergency operation - virtually twisting the arm of JPMorgan, one of the few banks not to have been clobbered on subprime, to take it off the Street.

This time round, the institution that is pressing red buttons is much bigger, far more ingrained in the national and international consciousness. This is the one that Rogoff calls "a whopper".

Here, there is a growing sense in the City that we haven't seen much yet. Northern Rock, a smallish operator in terms of capital exposure and jobs, ran into difficulties and there have been funding calls by some of the others, all of which have been met.

The problem, which Rogoff alludes to, is that we're nowhere near through this. The unease is that the writedowns we've witnessed, spectacular as they have been, related to the first phase of the crisis. As the credit squeeze bites and the downturn takes hold, possibly giving way to full-blown recession, defaults and repossessions will soar. One area of worry is credit cards - their loans were packaged up and sold on to speculators in just the same way as subprime mortgages.

Most of the losses and bank manoeuvres to date relate to one corner of the market. As Rogoff says, it is likely to get worse before it gets better.