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IMF forecasts $1.4 Trillion losses for U.S. financial sector
By
IANS
Washington: The International Monetary Fund (IMF) warned Tuesday that the U.S. financial sector losses could total $1.4 trillion as the housing crisis at the centre of the turmoil has yet to reach its peak.
The IMF, in its annual financial stability report, warned that the rate of US mortgage defaults that sparked the financial crisis has yet to reach its peak, despite a year of homeowners already defaulting on their loans in record numbers.
Banks will go under, and financial institutions will face an "inevitable" restructuring period as they battle to raise the capital needed to bolster their own balance sheets, the report said.
But the IMF urged governments in the worst hit countries - mainly U.S. and Europe - to take coordinated action to quell the market instability, set up a better regulatory framework to prevent future collapses and provide surviving banks with the help they need.
"What is needed now is a decisive and coherent international response that is systemic in its nature to ensure that the de-leveraging process remains orderly," said Jaime Caruana, head of the IMF's Monetary and Capital Markets Department in a separate statement.
The advice comes as European Union finance ministers agreed Tuesday to raise bank savings guarantees from 20,000 euros ($27,200) to at least 50,000 euros in a bid to quell the concerns of consumers.
The United States raised its own savings guarantees last week from $100,000 to $250,000.
Emerging economies will not be insulated from the financial crisis in industrial nations, the IMF warned.
The IMF, in its annual financial stability report, warned that the rate of US mortgage defaults that sparked the financial crisis has yet to reach its peak, despite a year of homeowners already defaulting on their loans in record numbers.
Banks will go under, and financial institutions will face an "inevitable" restructuring period as they battle to raise the capital needed to bolster their own balance sheets, the report said.
But the IMF urged governments in the worst hit countries - mainly U.S. and Europe - to take coordinated action to quell the market instability, set up a better regulatory framework to prevent future collapses and provide surviving banks with the help they need.
"What is needed now is a decisive and coherent international response that is systemic in its nature to ensure that the de-leveraging process remains orderly," said Jaime Caruana, head of the IMF's Monetary and Capital Markets Department in a separate statement.
The advice comes as European Union finance ministers agreed Tuesday to raise bank savings guarantees from 20,000 euros ($27,200) to at least 50,000 euros in a bid to quell the concerns of consumers.
The United States raised its own savings guarantees last week from $100,000 to $250,000.
Emerging economies will not be insulated from the financial crisis in industrial nations, the IMF warned.
Reader's comments(4)
1
In my opinion Governments should never induldge themselves in this Financial
Crisis, first of all, they don't have money themselves, and they are helping
banks who are themselves Reasons of this Crisis, lot of Families ,People, there
existance has been destoyed by the Representatives, workers or Bankers you might
call them, from my side the Government should put these Bankers immediatly
beheind bars and Confisicate all the Assets made through them, even if they are
on somebody elses name.The biggest blunder Governments will do if they bail them
out, as they will put good money for bad debts, and according to my expreience
it can never go good, that means money will loose its value, in future dollar
will have no buying power, that also goes for Euro, British pound.etc. I will
advise every Indian to Invest in Indian Rupee,Japanese Yen, chinese Yuan,
because these are the future Currencies of the world, People should buy, Bank
Shares once the thing has cooled down, instead of putting the money with the
banks as Savings, they should become shareholders,because People who have money
they should become partners.and I would appriciate if the Indian Government does
not fool around by Raising any kind of Taxes or also starts bailing Business
Sectors out. Every Company or Sector has to be treated as indvidual,and
answerable for himself othewise we will all land back into communist system, and
that has Failed in the past. or Dictators will take over.
This is A Free Advise..
Crisis, first of all, they don't have money themselves, and they are helping
banks who are themselves Reasons of this Crisis, lot of Families ,People, there
existance has been destoyed by the Representatives, workers or Bankers you might
call them, from my side the Government should put these Bankers immediatly
beheind bars and Confisicate all the Assets made through them, even if they are
on somebody elses name.The biggest blunder Governments will do if they bail them
out, as they will put good money for bad debts, and according to my expreience
it can never go good, that means money will loose its value, in future dollar
will have no buying power, that also goes for Euro, British pound.etc. I will
advise every Indian to Invest in Indian Rupee,Japanese Yen, chinese Yuan,
because these are the future Currencies of the world, People should buy, Bank
Shares once the thing has cooled down, instead of putting the money with the
banks as Savings, they should become shareholders,because People who have money
they should become partners.and I would appriciate if the Indian Government does
not fool around by Raising any kind of Taxes or also starts bailing Business
Sectors out. Every Company or Sector has to be treated as indvidual,and
answerable for himself othewise we will all land back into communist system, and
that has Failed in the past. or Dictators will take over.
This is A Free Advise..
Posted by:
harish nangia
2
Very lately forecasted...
-- Shilpa
I use www.mygoogle.co.in how about you
-- Shilpa
I use www.mygoogle.co.in how about you
Posted by:
Shilpa
3
What was the IMF doing all along sitting so close to the place where all this
mess began? They preached free-market economy to everybody.
mess began? They preached free-market economy to everybody.
Posted by:
Gopal
4
At last, U.S. dominance has come to an end, it is a lesson for all western
nations who are trying to rule the world by exploiting and attacking poor
nations.
nations who are trying to rule the world by exploiting and attacking poor
nations.
Posted by:
sameer
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