FRANKFURT (Thomson Financial) - The head of Goldman Sachs' German operations, Alexander Dibelius, said the fallout from the worldwide financial crisis, resulting from the reeling mortgage market in the U.S., is not yet over.
'We will most certainly experience a quarter filled with sizeable writedowns,' Dibelius told Tagesspiegel in an interview to be printed on Monday.
'Only when all of the gaps in capital flows are filled, will we finally have managed the crisis,' he said.
On the positive side, Dibelius said the mistrust between banks, which was apparent months ago, has largely subsided.
Dibelius said the financial crisis should be used as an example to show where improvements to the financial system can be made.
'We just can't have [a system in which] certain risks can be spun out of the balance sheet, without being able to further examine related risks,' he said.
Dibelius added, however, that he is against knee-jerk reactions that require a legal solution to every problem.
The banking head said it was quite possible that another mortgage crisis could pop up somewhere in the world and pointed to the real estate market in Dubai as a place it might happen.
'Even before skyscrapers are finished there, apartments within them have already been sold and resold three times - at a continually higher price. Few have stopped to ask themselves who really wants to live there long term,' he said. Tyler.Sitte@thomsonreuters.com ts/ak COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.