All the factors I cited earlier imply depletions of banks’ capital base. And the longer the problems remain, the sharper the depletion of banks’ capital will be. Indeed, the results of the due diligence being run on the banks in 1998 show how deep the impact of the crisis on the banking sector has been.
We fully realize that: (a) the recapitalization program is likely to be costly; (b) the recovery of the economy relies upon the recovery of the banking system, and thus on the recapitalization program; and (c) the failure of the recapitalization program would amount to the very costly delays to economic recovery; then the recapitalization program would have to be designed and implemented very carefully to assure its success.