Tuesday, April 21, 2009
Just when you thought it was safe to go back in the water . . .
The International Monetary Fund (IMF) has warned that potential losses from the credit crunch could reach $4 trillion (£2.75tn) and damage 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. It says that banks may need $1.7 trillion in additional capital. But it warns that political support for further bank bail-outs is waning. 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.