Banks and other financial institutions around the world will eventually need to write down assets by $4.1 trillion in order for global financial stability to be restored, the International Monetary Fund said on Tuesday.
In its Global Financial Stability Report, the IMF said U.S. institutions were about halfway through their needed write-downs, while their euro area counterparts are still lagging.
Banks will bear about two-thirds of the write-downs, which are coming on $58 trillion of debt originated in the United States, Europe and Japan, the IMF said.
It was the first time the IMF report had included losses on loans and related securities originated in Europe and Japan, which will total about $1.3 trillion.
The report said banks needed larger capital injections to weather the expected losses and restore investor confidence in the battered financial system.
Banks worldwide have so far raised about $900 billion in capital, about half of it through government rescue loans.
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