The FT has reported:

Institutional investors expect another big financial firm will collapse within the next six months in the continued fallout from the credit crunch, new research has shown.

Nearly 60 per cent of US and European institutional investors surveyed by Greenwich Associates believe there will be such a failure within the next six months. Another 15 per cent think it will happen in six-12 months.

The real question is why only one? Given that the fear is counter party risk and failure tends to have a domino effect stopping a major melt-down in the derivative sector, which looks like the next to crumble would be very difficult indeed.

I hope the regulators are ready. They must know they need to be this time.