ICF do not expect credit crisis to stop

/INTERFAX-AFI, Washington, July 29, 08/ - Experts of International Currency Fund (ICF) consider that world financial markets are still weak and indicators of system risks remain on rather high level even after a year of credit crisis, Financial Times informed with reference on fund's report. ICF fears that USA economy recession may prolong as a result of continuing disturbances on financial market. On the other hand, housing prices have already decreased in several European economies, including Great Britain, what is the indicator of further problems worsening on these markets. ICF announced that when possibility of losses increasing on credits of subprime class in USA was "mostly approved" by market's participants, financial organizations confronted serious problems on other types of loans. "On further housing prices falling and economy growth reducing, crediting quality on many types of loans became worse" - is said in the report. Falling of bank's shares value perplexed capital borrowing process, what in its turn affected financial indicators. According to ICF specialists, retirements of financial companies all over the word beginning last August, reached $400 bn. At that, fund stressed that the volume of losses "exceeded the volume of borrowed capital". Moreover, ICF submitted that total losses from the current cycle of financial crisis might reach $940 bn. This sum includes both losses from revaluation of companies` market price and losses, connected with write-off on hopeless credits. ICF finds with approval that so far we manage to restrain system risks by means of interfering of Ministry of Finance and Federal Reserve System in USA financial market's activity. However, the report specifies that "subject matter of strategic decisions and support volume became the topic" during last months, what can be treated as polite version of statement that USA authorities should support financial companies much more, FT marks. [2008-07-29]