Source:
BBCThe International Monetary Fund (IMF) has warned credit crunch losses could reach $4 trillion (£2.75tn), damaging the financial system for years to come.
It says that even if urgent action is taken to clean up the banking system, the process will be "slow and painful", delaying economic recovery.
...
One year ago, the IMF estimated that total losses from the credit crunch would be $1 trillion, which has been exceeded, showing how rapidly the financial meltdown has escalated.
The IMF now says that banks are likely to lose $2.7 trillion, but other financial institutions such as insurance companies and pension funds are also coming under strain.
Read more:
http://news.bbc.co.uk/2/hi/business/8009734.stm
The article proposes the public comes up with the extra capital needed. Someone explain me again why we have to pay for hot air please.
Insolvency -> receivership -> management out -> truth about the assets -> breakup of too big to fail / just let go poof all bets between parties not holding the underlying assets / return to traditional banking (deposits, loans, what Krugman called the Marble Banks we all associate "bank" with, as opposed to the Shadow Banking System)
In the US budget ,and in the belgian one I might add, another bank bailout round is already foreseen. Anyone else have the feeling we are being spoonfed info about the size of the crisis? The constant change in forecast is getting a bit ridiculous. It's as if they could not foresee the effects on the real economy. Companies started laying off 10-15 % a couple months in! Rupturing the link between financial and real economy is key says the IMF. Well, let the banks that deserve it go poof and effing STOP spending our real economy money!