Financial market losses could top USD 1,600 billion

7th July 2008, Comments 0 comments

Losses for banks holding risky assets could be four times greater then estimated, reports Swiss Sunday newspaper.

7 July 2008

GENEVA - The global financial crisis could lead to losses of USD 1,600 billion (CHF 1,651 billion) for financial institutes, according a report in the Swiss Sunday newspaper SonntagsZeitung.

It quoted a confidential study by the hedge fund Bridgewater Associates as saying losses for banks holding risky assets could be four times greater than the USD 400 billion previously estimated.

The hedge fund expressed doubts that the financial institutes would be able to drum up enough funds to cover the losses, something it said could exacerbate the crisis.

Bridgewater, one of the world's biggest hedge funds, based its calculations on the state of risky debt-based US assets, such as mortgages, credit and credit card demands.

The value of such risky assets is USD 26,600 billion, according to the hedge fund. The losses would amount to USD 1,600 billion if these assets were valued at market rates and not in the form of securitisation, the newspaper said.

[dpa / Expatica]

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