More Bad News: Finance Authority Fears $600 Billion in Worldwide Shortfalls
Germany's Financial Services Authority BaFin thinks that finance institutions worldwide could rack up shortfalls of up to $600 billion before the current crisis is over, according to an internal paper obtained by SPIEGEL.
Stock markets have been suffering from the ongoing finance crisis.
The paper also lists losses that have already been admitted to by various credit institutions: a total of $295 billion. Some 10 percent of those shortfalls are accounted for by German banks. Should that share of the damage remain constant, German banks can expect losses to be as high as $60 billion.
BaFin experts fear that the finance crisis will spread to other sectors of the economy. The turbulence could hit "other financial institutions outside of the banking sector," the paper says. The report lists hedge funds, insurance companies and retirement funds as being at risk.
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