Some of Wall Street's biggest names said they are frightened and worried by the debt crisis in Europe, but still don't expect a double-dip recession in the United States.
"We're frightened at this moment to see how this can all play out with these countries already in a fragile position," Larry Fink, chief executive of asset manager BlackRock Inc., said at a Reuters Insider newsmaker panel in New York.
He cited austerity measures that countries like Greece, Spain, Italy and Portugal must implement to deal with heavy debt loads.
"Now they're going to have to bring down their deficits in the tens of billions of dollars to stabilize their country, but will that destabilize their social fabric?"
Recent riots in Greece have sparked concerns about how austerity measures will play out in other countries, like Spain, where unemployment is already very high, Fink said.
"It's very hard to see a good ending," he said, noting his firm, which manages about $3 trillion in assets, is avoiding Southern Europe debt at the moment.
"The real question is how long can Netherlands, France and Germany support these Southern Rim countries," Fink said.
The latest developments are a strong signal that the global credit crisis is not over, as some had thought only a few months ago, Roger Altman, founder and chairman of boutique investment bank Evercore Partners
, said at the panel.
"The really serious crises of the last 150 years tend to be long and drawn out and have several stages, including a sovereign debt stage," he said.
"The global financial crisis is not over, and it's not close to being over, and there are probably other large shoes that can drop beyond Europe," he continued.
Another concern is the effect that the crisis has had on European banks and their ability to lend, said Joseph Perella, chairman and chief executive of investment banking firm Perella Weinberg Partners.
"Right now, people are concerned about the impact of this European crisis on the liquidity that will be available from their commercial banks," Perella said.
"If you're a major corporation in Europe and you think you might want to do a big acquisition ... you wonder whether or not what's going on in Greece or other countries could ultimately impact (European banks') ability to provide liquidity for you. "
While fiscal belt-tightening in Europe could slow growth, it won't necessarily torpedo a U.S. economic recovery, unless the debt troubles grow into a larger currency crisis for the euro, the panel said.
"At the moment, I don't think the problems in Europe will bleed into the United States," BlackRock's Fink said.
Altman said he expects "flat growth" in the euro zone, could simply pinch demand and shave a few extra points of growth off the U.S. economy in the next year.
Most economists think the U.S. economy will grow at a roughly 3 percent pace this year and next, so it would take a powerful blow to knock it back into recession.
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