Global bank losses total $1 trillion
Banks around the world have lost a total of $1 trillion in assets, according to a new study. The losses were almost balanced out by $920 billion in new investment, although a third of that came from governments. Nancy Marshall Genzer reports.
Pedestrians reflected in a share prices board in Tokyo (Yoshikazu Tsuno/AFP/Getty Images)
More on Investing, America's Financial Crisis
TEXT OF STORY
Scott Jagow: Today, we'll get a tally of bank losses around the world -- not that we really want to see it. Since the middle of last year, banks have lost almost a trillion dollars. Here's Nancy Marshall Genzer.
Nancy Marshall Genzer: The Institute of International Finance today releases its global economic outlook for 2009. The trillion dollars worth of bank losses were almost balanced out by about $920 billion in new investment. But a third of that came from governments.
Charles Dallara is the Institute's managing director. He says some banks would have failed without the government cash.
Charles Dallara: The government help has helped contain what could have been a massive financial panic.
The remaining two-thirds of the banks' investments came from private sources, including funds run by Middle Eastern governments when they were flush with oil money. That cash has dried up, along with investor confidence.
Walter Gerasimowicz is CEO of Meditron Asset Management:
Walter Gerasimowicz: They're going to be wary about infusing additional capital until they really see that there is a bit of a bottom.
Since the bottom is nowhere in sight, Gerasimowicz says, banks will rely more and more on government funds to prop them up.
In Washington, I'm Nancy Marshall Genzer for Marketplace.
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From Santa Cruz, CA, 12/18/2008
By taking all of the cash out of circulation the banks have elevated themselves to the rank of government. Their regulations are NOT LAWS yet by monopolistic practices they now control credit.
The government even believes that the banks are quasi-government.
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