Business Intelligence

Collateral Damage Part 2: Taking Robust Action In The Face Of The Growing Crisis

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Executive Summary

In the three weeks since the first paper, the situation has deteriorated. As of October 20, total losses for the year at banks and insurance companies have risen to $661 billion on a global level: about $408 billion in the Americas, $228 billion in Europe, and S25 billion in Asia. Taking into account the mark-to-market losses on related securities with the losses on U.S. consumer and corporate loans, the IMF now estimates crisis-related losses of nearly Sl.5 trillion on the worldwide holdings of U.S. assets alone. So the first estimate of loan losses in the range of $1.5 trillion globally looks conservative now.

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