November 9, 2007 (LPAC)--"Central bankers, do something!" cries the Hong Kong-based Bank of East Asia's chairman, David K.P. Li. In an interview with Newsweek Nov. 9, Li makes clear that the U.S. mortgage bubble meltdown is now a full-blown bank crisis, and says, "The central banks have to come to the rescue. Basically, they should create something similar to the Resolution Trust Corp., which was established to deal with the savings and loan crisis in America [in the 1980s]. Today's problem is bigger."

Li also fears the U.S. dollar crash collapsing China's economy. "My worst-case scenario is that the [Chinese] bubble bursts and a lot of people in China lose most of their savings," he says.

Li is the second leading Asian banker to sound this alarm and call to central bank "action" this week. Chairman Kim Yong-duk of the Korea Financial Supervisory Commission, at an international conference held by the Bank for International Settlements in Sydney, Australia Nov. 6, said that "governments and central banks should make joint efforts to prevent an abrupt bust of asset bubbles."

Li's reference to the Resolution Trust Corp. points toward a global attempt, by all the central banks, to come up with something like the "master liquidity enhancement conduit" (MLEC) proposed by U.S. Treasury Secretary Hank Paulson in early October, with the vain hope of keeping bad debt-assets from being liquidated, until they magically revive at some future point.

But Paulson's MLEC has already been rendered "dead before arrival" by the ongoing forced liquidation of assets of the very bank investment vehicles he wanted to save. So Li's interview only shows how disastrous the bankers now consider the dollar crash and financial crisis to be.