Sub-prime losses to top $1trillion
LOSSES from the sub-prime crisis are set to reach almost $US1trillion ($1.08trillion), according to the International Monetary Fund, which has warned the global credit crunch may get worse, with a risk of major bank failures.
The forecast losses are 10 times the size of the estimate made by the US Federal Reserve chairman, Ben Bernanke, last July.
The IMF said write-downs and losses would reach $US945billion over the next two years, with the possibility of a further $US60billion to $90billion in bank losses caused by the downgrading of credit ratings of insurance companies that have guaranteed bonds. The IMF said these losses were putting the world's biggest financial institutions under strain.
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