WASHINGTON — The world’s banks could be spared billions in losses thanks to a global economy that is recovering from the financial meltdown more quickly than initially expected.
The International Monetary Fund is forecasting that global bank losses from the financial crisis will total $2.28 trillion, a drop of $533 billion from an estimate made in October.
The IMF said Tuesday that its forecast for losses just for U.S. banks had dropped to $885 billion, down from an estimate of $1.03 trillion made in October.
But the IMF cautioned that while risks to the global economy from financial-sector instability had lessened from a year ago, the risks from government debt burdens such as the problems in Greece had increased.
A debt crisis in Greece is still roiling markets and raising concerns about debt burdens in other countries, including the United States, which has seen the federal deficit surge to a record of $1.4 trillion last year.
“While attention has been on Greece, fiscal concerns are not confined to one country,” Jose Vinals, director of the IMF’s monetary and capital-markets department, told reporters at a briefing.
He said debt levels in many countries were approaching highs not seen since the end of World War II.
Vinals said the IMF saw the rise in government debt burdens as a major challenge facing the global economy. He said it was critical for countries to develop credible plans to get control of them.
