According to International Monetary Fund (IMF) Sub-prime credit crisis has triggered a 'negative feedback loop' in the global economy that poses risks for growth.
Global financial markets continue to be fragile and indicators of systemic risks remain elevated.
Credit quality across many loan classes has begun to deteriorate with declining house prices and slowing economic growth.
Banks are under 'renewed stress' to raise additional capital amid a sharp plunge in banking stocks, which has 'increased the likelihood of a negative interaction between banking system adjustment and the real economy.
The IMF estimated banks and financial institutions have written off in excess of 400 billion dollars in soured mortgage-related investments.
The 185-nation institution said that due to the slump in the asset-backed securities and ongoing loan delinquencies, it had 'little reason' to change its April 3 estimate of of 945 billion dollars for the 'total mark-to-market losses' in the financial crisis.
With sharply rising loan delinquencies and foreclosures and a continuing fall in home prices, a bottom for the housing market is not yet visible! More bad news to come.....?
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