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Credit crisis losses head for $4 trillion

IMF right.jpgTo misquote the famous HL Mencken phrase, "nobody ever went broke under-estimating the losses caused by the credit crisis".

Initially, Fed chairman Ben Bernanke estimated the losses at just $100bn.

Then, a year ago, the IMF said its estimate was $1 trillion. Now, the IMF is raising its estimate even higher, this time to $4 trillion.

According to The Times, the Fund expects $3.1trn of these losses from US-originated assets, and $900bn from EU lending. Even more worryingly, as Nouriel Roubini points out, these estimates do not include prospective losses from corporate loans to highly-indebted companies. According to respected analyst Mike Mayo, the banks are still carrying these loans at close to face value.

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This page contains a single entry from the blog posted on April 9, 2009 6:18 AM.

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