IMF: Financial crisis may cost 800 billion US dollars

Marţi, 18 martie 2008, 14:43 English | Business

The crisis currently affecting international markets may engulf the whole financial system which may lead to a drop of the value from the books of financial institutions worldwide by 800 billion US dollars, according to an IMF official quoted by Reuters. Anoop Singh, an IMF director, believes that the possibility that the US enter recession is high and that the losses of the subprime crisis in the US will result into deepening losses for European banks.

This is a period of exceptional uncertainty and the distribution of risks for the US perspective is extended, accompanied by a high probability of new shocks to lead the American economy to recession, Singh said.

He said the crisis affecting the real estate sector in the US is a level zero for problems affecting financial markets.

And he believes the banks' losses because of the risky mortgage markets will amlunt to some 230 billion US dollars.