Economists and other finance experts say some U.S. banks are insolvent, adding that government may need to take a bigger role allow banks to resume the lending needed to improve the economy, according to a report from the New York Times.

Some U.S. banks are suffering from bad assets which are not being sold in the current market. U.S. banks face a drop of $1.8 trillion in the value of their assets, a portion of the $3.6 trillion asset value drop expected for financial firms overall, said Nouriel Roubini, a professor of economics at the Stern School of Business at New York University, the Times reported.

The United States banking system is effectively insolvent, Mr. Roubini said.

In the Times' report, it acknowledges that the experts' research does not focus on individual banks. Banks could also continue to operate for a long time even if they were technically insolvent and could recover financial health if the economy turns around, the report notes.

The U.S. Treasury said this week that banks with more than $100 billion in assets will have to submit themselves to a stress test to measure if they have enough capital to continue lending despite losses which could come if the economy declines more than projected.

Former chief economist of the International Monetary Fund Simon Johnson estimates have a capital shortage of $500 billion, which could increase to $1 trillion, he told the Times.

A trade group representative for the Financial Services Roundtable disagrees with that assessment, saying that their research doesn't reveal any insolvency.

Our analysis shows that the banks have varying degrees of solvency and does not reveal that any institution is insolvent, said spokesman Scott Talbott.

The President of the American Bankers Association Edward Yingling, also dismisses the statement, saying claims of technical insolvency is speculation by people who have no specific knowledge of bank assets.