Tag Archives | IMF

Iceland calls in IMF

As the blog predicted, Iceland has been forced to call on the IMF for help. Finally, the country’s leaders have recognised that their $20bn economy couldn’t support the level of debt built up during the ‘go-go’ years. The pity is that it took them so long to recognise reality – and by then, any chance […]

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‘The time for piecemeal solutions is over’

The International Monetary Fund (IMF) has now increased its estimate of total sub-prime losses to $1.4 trillion, versus $945bn in April. It estimates banks will need to raise $675bn in new capital. And Dominique Strauss-Kahn, the IMF MD, has called for the major economies to respond to the credit crisis with ‘a collective commitment by […]

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Iceland on the brink

Last March, the blog noted an excellent article on Iceland by Gillian Tett of the Financial Times. She argued that Iceland was ‘the first country run like a hedge fund’. And she worried that its banks might prove not ‘too big to fail’, but ‘too big to rescue’? Now, it looks as though we are […]

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Another view of the Wall St crisis

Ken Rogoff was Chief Economist at the IMF, and is now a Harvard professor. His view on Wall Street’s current problems is refreshingly different. Writing in The Guardian, he notes that ‘efficient financial systems are supposed to promote growth in the real economy, not impose a huge tax burden’. But, he adds, ‘the US financial […]

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$514bn and counting

There seems no end to the losses being revealed by the world’s major banks. The total has now reached $514bn. 110 banks and investment firms have now posted writedowns. CitiGroup, the largest US bank, tops the list with $55.1bn of losses, closely followed by Merrill Lynch with $51.8bn. Then comes UBS of Switzerland with $44.2bn. […]

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‘Grey hair and good advice matter’

The credit crunch began a year ago. At that time, the blog was very much in a minority when worrying that it might turn into something big enough to impact ‘the real economy’. A year later, it is fascinating to review the crunch’s impact so far, and how people’s attitudes have changed:

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The cost of Asian subsidies

The Asian Development Bank (ADB) says Asian governments ‘are caught in the pincer grips of slowing growth and rising inflation’. Whilst the cost of subsidies is ballooning. India, for example, will spend $42.5bn in oil subsidies this year, ‘six times the entire education budget’. As the ADB notes, `increased food and energy subsidies erode fiscal […]

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‘Sometimes those questions lead to war’

The weekend’s finance minister meeting in Washington DC seems to have been quite different from its predecessors. Not only did they apparently have an ‘informal brainstorming session’ at one point, but they also found themselves confronted with two major and on-going crises: • We have to ‘put food into hungry mouths’ commented Bob Zoellick, President […]

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Credit crisis losses could reach $1 trillion – IMF

Last week the IMF warned there was a 25% chance of a global recession in 2008. Today, it said that the ‘crisis (was) creating serious macroeconomic feedback effects’ and could have ‘profound financial system and macroeconomic implications’. We normally expect central bankers to weigh their words carefully. But now the IMF has decided to throw […]

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IMF expects low growth, high inflation

The IMF now sees a 25% chance of a world recession this year, in which global growth would fall below 3%. Its base forecast is just 3.7%, compared to 5.2% before the credit crunch began. Sales growth for most chemicals is tied to GDP growth, so companies should expect volumes to come under pressure as […]

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