THE credit crisis is likely to worsen and Europe will have a harder time than the United States, tycoon Oei Hong Leong said yesterday. 'The US government has the capacity to bail out its banks, but Europe is in big, big trouble, with banks too big to be saved ... I think the situation is getting worse.' - Mr Oei Speaking at an event to honour his $7 million donation to the Lee Kuan Yew School of Public Policy, Mr Oei reiterated his earlier assessment of current financial turmoil as 'just the end of the beginning'. While the $7 million was the handsome payoff on his gamble last month on one million American International Group (AIG) shares, Mr Oei said of the present situation: 'If there's any rally in the market at all, just get out. It's better to cut losses. I think things can get much worse.' He bought AIG stock at US$1.80 apiece in the belief the company was too big to be allowed to fail. The US government intervened with an US$85 billion bailout on Sept 17 - and he sold the stock on Sept 22 for about US$5 a share. 'You've got $5 trillion in assets that are going to be deleveraged. $700 billion is far from enough,' he said yesterday, referring to the US government's bailout plan, which he reckons is insufficient to restore confidence in financial markets. Mr Oei thinks the US government has the capacity to bail out its banks but reckons Europe is in 'big, big trouble', with banks too big to be saved. 'Deutsche Bank's exposure is about 80 per cent of Germany's GDP,' he said. 'The combined exposure of Credit Suisse and UBS is six times that of the Swiss GDP. I think the situation is getting worse.' European governments this week pledged to defend the European banking system's stability, but no specific rescue plan has emerged yet. Mr Oei's donation will go into an endowment fund awarding scholarships to students from China. The government will match his gift one-for-one. Of the 283 students currently enrolled at the LKY School of Public Policy, 42 are from China. Mr Oei said: 'In China, they have learnt Western capitalism very quickly. But a lot of what has been learnt is bad capitalism - the greed and getting rich at all cost. What needs to be learnt are the good things about capitalism - proper governance, fairness, contribution to the community.'