Bank write-downs to touch $4.1 trillion, says IMF

22 April 2009

The International Monetary Fund (IMF) said on Tuesday that banks around the globe will need to write down about $4.1 trillion in loans and securities. So far, about one-third of that amount has been written down.

The global financial body also called for redesigning the global financial system to provide a ''more stable and resilient platform for sustained economic growth.''

 The Fund has increased its estimate of the potential losses in the US to $2.7 trillion, substantially higher than the $2.2 trillion it forecast in January and $1.4 trillion last October, as a result of the deepening economic slump over the past three months.

So far, the US banks have written down about $510 billion in assets.

The write-downs in Europe and Japan so far have totaled $154 billion, which is expected to go as much as $1.3 trillion over the next two years.

Meanwhile, the UK banks are facing losses of $316 billion through 2010, of which credit losses so far have been $110 billion, the IMF said.