IMF says estimated crisis losses down by $600 billion

Likely losses from the financial crisis in the three years to 2010 have been reduced by $600 billion to $3.4 trillion as the world economy grows faster than previously expected, the International Monetary Fund said today.

The organisation warned however that the impetus for far-reaching financial reforms risked being lost if the improving situation leads to complacency.

In its half-yearly Global Financial Stability Report presented in Istanbul, Turkey, the fund said concerted efforts by governments and central banks to deal with the crisis and fledgling signs of a global economic recovery have helped limit the losses.

"Systemic risks have been substantially reduced following unprecedented policy actions and nascent signs of improvement in the real economy," the IMF report said.

"There is growing confidence that the global economy has turned the corner, underpinning the improvements in financial markets,'' it added.

The IMF said its analysis suggests that US banks are more than halfway through the loss cycle to 2010, whereas in Europe loss recognition is less advanced, reflecting differences in the regions' economic cycles.

A top IMF official noted that the conference in Istanbul was taking place just over a year since the Lehman Brothers bankruptcy triggered the sharpest phase of the global financial and economic crisis.