IMF global debt figure could double
The IMF expected $2.2 trillion in bad debt from banks back in January for the end of next year. Now, the fund says that figure could double. Stephen Beard reports pressure is on governments to deal with the global debt.
International Monetary Fund Managing Director Dominique Strauss-Kahn (Alex Wong/Getty Images)
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Renita Jablonski: The week started with warnings about the solvency of U.S. banks. This morning, a much broader warning: the world's banks may soon be in a much bigger hole than first thought. The price tag of the pain may be as much as $4 trillion. From London, Stephen Beard has more.
Stephen Beard: The numbers just keep getting bigger. In January, the International Monetary Fund came up with a figure of $2.2 trillion. That's the total of bad debt it expected the banks to rack up by the end of next year.
Now according to British press reports, the figure is spiralling upwards. The IMF could be set to forecast that global bad debts will almost double to $4 trillion.
Grainne Gilmore, economics correspondent of the London Times:
Grainne Gilmore: Not only are banks suffering from their exposure to subprime financial instruments. They're now suffering -- because of the recession -- they're now suffering on their standard mortgages, credit cards, overdrafts. People are defaulting on these at a higher rate.
Analysts say the pressure is on governments to do more to clean up the bad debt. But after so many multibillion-dollar bailouts, voters' resistance is growing.
In London, this is Stephen Beard for Marketplace.
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