from Reuters:
Global write-downs of toxic debt among banks and financial institutions in the United States, Europe and Japan could reach $4.1 trillion, the International Monetary Fund said on Tuesday.
This marks the first time the IMF has included estimates of credit losses on debt originated in Japan and Europe since the global financial crisis started in 2007.
The IMF's Global Financial Stability Report said banks needed more capital to weather the expected write-downs and to restore investor confidence in the financial system.
Banks worldwide have so far raised about $900 billion in capital, about half of it through government rescue loans.
The IMF also said it now expects the deterioration in U.S.-originated assets to reach $2.7 trillion, substantially more than the $2.2. trillion it forecast in January. The sharp increase reflects losses mainly between October and January.
Globally, banks will face the bulk of the write-downs. The IMF estimated write-downs for loans and securities held by banks could be about $2.8 trillion, and that about one-third has already been written down.
