Friday, October 02, 2009

IMF warns that banks have yet to reveal their losses

The Financial Times quotes the International Monetary Fund (IMF) in announcing that banks around the world still have to reveal about half their likely losses resulting from the financial and economic crisis, warning there was still a "significant" risk of another downward lurch in the global recession.

The IMF in its Global Financial Stability Report wrote: "US domiciled banks have recognized about 60 per cent of anticipated writedowns, while euro area and UK domiciled banks have recognized about 40 per cent."

A failure to reveal the true scale of the losses they are likely to face ...would undermine the economies of the US, the UK and the euro zone and could generate a renewed vicious spiral, the IMF said.

Losses are likely to prove largest in the US and UK - where banks held more toxic assets and the downturn in commercial property has been greatest.

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