IMF: Half of bank losses may still be concealed

Banks, especially European ones, may be concealing half of their losses, says the Managing Director of the International Monetary Fund (IMF), Dominique Strauss-Kahn.

In an interview for French publication "Le Figaro", Strauss- Kahn said: "There are still losses that have not been revealed. It"s possible that 50% of bank losses may be hidden inside the balance sheets of lenders. The ratio is greater in Europe than in the United States".

According to Dominique Strauss-Kahn, the history of banking crises proves that there can be no healthy and strong growth without a complete cleanup of the lender balance sheets.

The IMF official also discussed the Euro, which he said was "a bit too strong".

• Additional funds for lending

The 26 members of the facility New Arrangements to Borrow (NAB) of the International Monetary Fund (IMF) have decided to increase the lending agreements from USD 500 billion to USD 600 billion, as well as to co-opt new participants.

At the meeting with 13 new potential members of the NAB, it has been decided that there would be increased flexibility for the program and new standard criteria would be set which would allow participants to grant additional funding to the IMF.

"The agreement concerning the extension of the NAB will increase the efficiency of the IMF in fighting the crisis and will consolidate the architecture of the international financial system", said Dominique Strauss-Kahn.

NAB is a lending facility between the IMF and a group of its member countries and other institutions, which provide the IMF with additional resources when needed, in order to prevent the destabilization of the international monetary system.

To provide enough liquidity for the IMF, the leaders of the G20 have reaffirmed in September their commitment to triple the IMF"s available resources compared to their pre-crisis levels (around USD 250 billion), by making up to USD 500 billion dollars available to the institution.