Ask for more money from governments to normalize banks
Washington. (EFE) .- The crisis will cause 4.1 trillion dollars in losses to the financial sector in the United States, Europe, and Japan, according to the International Monetary Fund (IMF), which asked more money to governments to normalize markets.
The IMF evaluated for the first time the potential
losses between 2007 and 2010 of the financial institutions due to the collapse of the value of the assets in the main advanced countries and reached the figure of 4.1 billion dollars, two-thirds of which will correspond to the banks.
So far, the IMF had calculated only the losses for US assets, which today predicted that they will amount to 2.7 trillion dollars, 500 billion more than estimated in January.
This revision responds to the worsening of growth prospects worldwide, according to the entity.
Although there have been some improvements in the interbank credit markets, the global financial system remains under “serious tensions,” the agency warned.
It is no longer just the problems of US mortgage assets, but the recession has worsened bank accounts, “amid an uninterrupted fall in the value of assets,” according to the IMF.
Their “mattresses” of capital are in danger, which prevents them from granting loans, explains the Fund’s report.
The total volume of credit could fall in the United States
the United Kingdom and the eurozone in the short term, and it will take years to recover, predicted the multilateral organization.
In this context, governments must prop up the first “signs of stabilization” exhibited by the financial system with new “decisive” measures.
According to the calculations of the Fund, the banking of the United States and Europe requires 875,000 million dollars to return to the level of indebtedness of before the crisis, which has cracked the value of its assets.
Governments should inject capital into banks and even nationalize them, given that entities are unable to raise private money under current market conditions, according to the IMF.
“The provisional transfer of property to the State may be necessary, but only with the intention of restructuring the institution and returning it to private hands as soon as possible,” the report states.
At the same time, the IMF warned of the appearance of a harmful “financial protectionism”, which is manifested in the pressure of the authorities for banks to direct their loans to the national market and for consumers to keep spending within the borders.
The financial crisis has taken on a new front with its sudden arrival in developing countries, a phenomenon for which the Fund called for “urgent attention”.
Instead of receiving foreign capital, emerging markets will “export” money this year due to the departure of banks and investors from their borders, according to the IMF.
The disbanding puts them in a delicate position because this year these countries will need $ 1.8 trillion to refinance their debt, mainly for the private sector.
Governments may have to come to the rescue of their companies, but if the situation worsens they should also prepare for large-scale bankruptcies, the agency warned.