by Calculated Risk on 10/27/2008 08:22:00 PM

From The Times: Banks may need further support from taxpayers as recession bites

Britain's banks may need to raise capital above and beyond the £50 billion of taxpayer-underwritten money already earmarked for them.

The Bank of England's report into financial stability today suggests that a recession as severe as that of the early 1990s would lead to credit losses of £130 billion for Britain's six biggest financial institutions and possibly wipe out the entire government-backed funding package.

The U.S. GDP is about five times the U.K, and that would suggest the eventual cost of the U.S. bailout might be over $1 trillion.

Note: £130 billion X 5 / exchange rate 0.646329 = $1 trillion.

That is less than the number Professor Krugman speculated about over the weekend:

Do the math ... these numbers seem to suggest that an eventual outlay of $2 trillion is in the realm of possibility.

But more might be required.