THE GUARDIAN: US banking losses estimated at $1.4 trillion / Strauss-Kahn: 'Time for piecemeal solutions is over'
The International Monetary Fund today added its weight to the growing calls for a comprehensive and coordinated international response to the global financial crisis, which it says has become disorderly and more damaging than it previously thought.
In its latest twice-yearly Global Financial Stability Review, the Washington-based institution dramatically raised its estimate of losses to the US banking system to around $1.4 trillion (£800bn), 45% up from the $945bn it estimated in April and reaffirmed just two months ago.
It also estimated that the major global banks need to raise some $675bn in new capital in the next few years.
The IMF report was released as shares in Britain's banks plunged once again, following emergency talks with the government last night over a possible injection of billions of pounds of taxpayers' money into the banking sector.
The IMF's managing director, Dominique Strauss-Kahn, said the report "shows how serious a crisis we currently face".
"The time for piecemeal solutions is over. I therefore call on policymakers to urgently address the crisis at a national level with comprehensive measures to restore confidence in the financial sector. At the same time, national governments must closely coordinate these efforts to bring about a return to stability in the international financial system."
He spoke as European finance ministers were meeting in Luxembourg to try to thrash out some sort of response to the growing financial emergency, and looked likely to raise depositor protection to €100,000 (£78,000). IMF Urges Rapid, Coordianted International Response to Financial Crisis >>> Ashley Seager | October 7, 2008
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