Global losses from the credit crisis could exceed $4.1 trillion by the end of 2010, according to a report from the International Monetary Fund (IMF) released on Tuesday morning.
The IMF raised its projection for $1.4 trillion in credit losses from U.S. financial institutions to a $2.7 trillion loss, while euro zone bank losses will increase by $750 billion through next year.
As a consequence, the IMF is calling on countries to take stimulative actions to stabilize their financial systems. "...although progress is being made, further policy efforts will be required," the report says.
The news comes on the backdrop of downbeat comments made by the Fund's managing director over the weekend.
Speaking in an interview with Handelsblatt, Managing Director Dominique Strauss-Kahn said the Fund's global growth forecasts will be revised down.
"Until now, we were assuming that the world growth rate would be negative by a half to one percentage point," Strauss-Kahn told the newspaper on Sunday. "But, now it is becoming more negative."
The IMF is expected to release its revised estimates in the upcoming week.