Credit crisis losses head for $4 trillion

IMF right.jpg

To 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.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

, ,

Leave a Reply