IMF’s Strauss Kahn, in an interview with the Suddeutsche Zeitung, has warned that banks around the world may face further losses as not all risks have been located yet. The official feels the stabilisation of banks in industrialised countries isn’t going fast enough, but is an important prerequisite for economic stimulus packages as they only worked properly once banks’ balance sheets were sorted out.
Strauss-Kahn says the IMF would need additional resources should the crisis last another 6 months, adding there is a consensus to double the IMF’s resources to at least $500 bln, including a $100 bln loan from Japan.
Emerging markets such as Eastern Europe are a concern, due to deteriorating world trade and because western banks are repatriating their money. Strauss-Kahn warned “If you don’t find a solution here, there will be painful repercussions for the industrialised countries.”
