IMF: financial institutions, the loss will reach 4 trillion U.S. dollars

International Monetary Fund (IMF) in its April 2009 time span, “Global Financial Stability Report” in the anticipated economic tsunami initiated by the international economic organisations or asset write-downs will be roughly four trillion U.S. dollars, and the position is oddly severe.

IMF spiky out that the four trillion U.S. dollars in supply write-downs, the bank will assume two-thirds of which is come seal 2.7 trillion U.S. dollars. In supplement, by the drop in supply prices, all kinds of non-bank economic institutions during the calamity is also facing very many pressure. Held by numerous insurance businesses such as stocks and corporate bonds suffered losses, numerous pension funds held by the Government bond end products fell. IMF Special Note that, even so the majority of these institutions may be prudent to manage danger, but numerous endure a greater danger, but not fully aware of the probable in front of the pressure that may arise.

In addition, by the financial turmoil has resulted in capital from foreign markets, the pace too fast, aggravated the crisis in emerging market countries. IMF believes that foreign investors and banks together with the divestment of the collapse of export markets for emerging market economies led to the financing pressure, the need for urgent attention. Emerging markets is a huge demand for refinancing, it is estimated that in 2009 about 1.8 trillion U.S. dollars, most of which demand from companies, including financial institutions. Although it is difficult to predict, the current estimate is that in 2009 net flows to emerging markets private capital will be negative, and the future capital inflows is unlikely to return to pre-crisis levels.

Governments ought take estimates, IMF also suggested. IMF warned in its journal that, in lead to escape deterioration of the circumstances, governments must take a stringent policy action. Although the Government to penetrate other funds into the banking system and the plays of numerous progress, but in dealing with evil-minded debts and the banks can not afford to blocked down insolvent economic institutions, it ought be more efforts.

IMF said that in order to ensure the effective implementation of the restructuring plan, the Government will sometimes take over some or all financial institutions is necessary, but the Government must resume as soon as possible of its private status, and in the bank at the same time restructuring the provision of adequate liquidity. For those banks have been unable to survive, they should be fast so that they shut down.

At the identical time, in alignment to bypass the economic protectionism, directed to the urgent position on appearing finances have a larger destructive, IMF furthermore suggested that the coordination of principle, to bypass beggar-thy-neighbor approach, which farther pattern a steady international economic system.