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I.M.F. Puts Bank Losses From Crisis at $4.1 Trillion - NYTimes.com
WASHINGTON -- With the global economic downturn deepening and confidence in the financial system still elusive, the International Monetary Fund estimates that banks and other financial institutions face aggregate losses of $4.1 trillion in the value of their holdings as a result of the crisis.

 In its global financial stability report, released Tuesday, the fund estimated that financial institutions would have to write down an estimated $2.7 trillion in loans and securities originating in the United States from 2007 to 2010. That estimate is up from $2.2 trillion in the fund's report in January, and $1.4 trillion last October.

The financial crisis "is likely to be deep and long lasting," the report said, noting that global financial stability has deteriorated further since its October report, especially in emerging markets, particularly in Europe, where banks face more write-downs and may require fresh equity, even as businesses seek to refinance debt.

The authorities "have been proactive in responding to the crisis," the fund said, but "policies are being challenged by the scale of resources required."

The fund also cast doubt on recent market optimism, noting that in spite of "some improvements in short-term liquidity conditions and the opening of some term funding markets, other measures of instability have deteriorated to record or near-record levels."

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Apr 21st, 2009 at 12:23:08 PM EST
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