FT.com: Within the banking systems, the IMF estimates that losses will total $2,800bn alone and that banks have so far recognised only $1,300bn of those losses. “US domiciled banks have recognised about 60 per cent of anticipated writedowns, while euro area and UK domiciled banks have recognised about 40 per cent,” the report said.
SHOOT: Seems the banks are in denial. You deny what is on the balance sheets, claim bumper 'profits', and use these ill-gotten gains to further distort your balance sheets. I have said before that I predict a downward slope in a series of steps, as reality takes successive bites out of a market that periodically makes concessions to reality.
Banks round the world have still to reveal about half of their likely losses resulting from the financial and economic crisis, the International Monetary Fund said on Wednesday, warning that there was still a “significant” risk of another downward lurch in the global recession.
The IMF described credit risks as remaining “elevated” even though financial conditions have improved significantly since spring.
It said these risks, alongside weakened banks, were likely to depress the availability of new credit and damp the global economic recovery unless significant additional capital was raised to improve the health and lending capability of banking systems.
In its twice-yearly Global Financial Stability Report, published on Wednesday in Istanbul, the IMF, estimated the ultimate losses in the financial system would total $3,400bn between 2007 and 2010, an improvement from the $4,000bn estimate it published in April.
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