Global bank losses total $1 trillion
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Scott Jagow: Today, we’ll get a tally of bank losses around the world — not that we really want to see it. Since the middle of last year, banks have lost almost a trillion dollars. Here’s Nancy Marshall Genzer.
Nancy Marshall Genzer: The Institute of International Finance today releases its global economic outlook for 2009. The trillion dollars worth of bank losses were almost balanced out by about $920 billion in new investment. But a third of that came from governments.
Charles Dallara is the Institute’s managing director. He says some banks would have failed without the government cash.
Charles Dallara: The government help has helped contain what could have been a massive financial panic.
The remaining two-thirds of the banks’ investments came from private sources, including funds run by Middle Eastern governments when they were flush with oil money. That cash has dried up, along with investor confidence.
Walter Gerasimowicz is CEO of Meditron Asset Management:
Walter Gerasimowicz: They’re going to be wary about infusing additional capital until they really see that there is a bit of a bottom.
Since the bottom is nowhere in sight, Gerasimowicz says, banks will rely more and more on government funds to prop them up.
In Washington, I’m Nancy Marshall Genzer for Marketplace.
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