By: Mike Campbell
The International Monetary Fund (IMF) has revised its forecast for the cost to the banking sector, stemming from the global economic crisis. The IMF has chopped 0.6tn$ off its cost estimate for the crisis to the banking sector between 2007 and 2010. It now suggests that the bill will be 3.4tn$ (that’s 3.4 million million dollars); given that the world population is around 6bn souls, that equates to slightly under $570 per human being; just to put the figure into perspective.
The IMF revision was made because it believes that the global economy has started to recover faster than expected. The IMF warned against any complacency and urged that necessary financial reforms be put in place without delay. However, the IMF cautioned that many banks had yet to fully account for their losses which means that more bad news is in the pipeline. The financial reforms that are under consideration now include; requiring banks to increase cash reserves; stricter regulations on major financial institutions to cover risk taking; reducing the effects of the boom and bust cycles through regulatory systems; improving international co-operation to better cope with major businesses that trade globally.
The IMF is widely predicted to increase its forecast for next year’s economic growth by half a percent to 3%. Although this is good news, the IMF warned that unemployment risks are likely to remain for quite some time, until the recovery stimulates demand and with it, more employment.
The Eurozone inflation rate dropped by 0.3 year-on-year for September, figures released by EuroStat revealed yesterday. This was the fourth successive month when prices within the block had fallen.
IMF Says Bank Loses Will Be Better Than Expected
DailyForex.com