IMF: Crisis Leads To 300 Billion Euro Credit Risk In European Banking Sector

2011/9/26 11:11:00 29

The International Monetary Fund (IMF) said that

Europe

The debt crisis has caused European banks a credit risk of up to 300 billion euros ($410 billion), calling on banks to placate investors and support them through capital injection.

lending

。

IMF said that Europe's political debate on the prevention of crisis proliferation and the measures taken to postpone the implementation have increased concerns about the risk of default by governments.

IMF said that the banking industry is facing a "financing challenge" because investors are worried about potential losses in their holdings of government bonds, some of which are heavily dependent on the ECB for liquidity.

"Some banks must raise funds to help ensure the confidence of their creditors and depositors."

IMF wrote in the global financial stability report released last Wednesday, "if there is no more capital buffer, the problem of obtaining capital is likely to bring the pressure of deleveraging to banks, which will force them to reduce the credit to the real economy."

IMF downgraded its global growth forecast last Tuesday, saying that if policymakers failed to stop it,

debt

The crisis is sweeping across Italy and Spain and is expected to have serious consequences.

IMF said last Wednesday that, in addition to the credible strategy of reducing public debt by governments, the banking sector should be recapitalise, and public injection would be needed if needed.