IMF estimates $1 trillion in losses

The International Monetary Fund (IMF) says potential losses from the economic crisis could reach $4 trillion and cause more damage to financial systems for years to come.



A year ago, the IMF estimated that total losses from the credit crunch would be $1 trillion.



According to the IMF, even if urgent action is taken to clean up the banking system, the process will be slow, delaying economic recovery.



The IMF now says that banks are likely to lose $2.7 trillion as other financial institutions such as insurance companies and pension funds are also coming under pressure.



The IMF says that restoring the banking system so that it functions normally is likely to take several years, and this will make the recession longer and deeper than usual.



It’s expected to present its world economic forecast tomorrow.