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The International Monetary Fund said today the worldwide losses stemming from the US sub-prime mortgage crisis could hit US$945 billion ($1.2 trillion) as the impact spreads in the global economy.
The IMF, in a particularly stark biannual report, said that falling US housing prices and rising delinquencies on the residential mortgage market could lead to losses of US$565 billion.
Combined with other categories of loans originated and securities issued in the United States related to commercial real estate, the consumer credit market, and corporations "increases aggregate potential losses to about US$945 billion", it said.
"The crisis is spreading beyond the US sub-prime market - namely to the prime residential and commercial real estate markets, consumer credit, and the low- to high grade corporate credit markets," the IMF said in releasing its Global Financial Stability Report.
