Reply #19: IMF warns subprime crisis losses 'may be higher'

[Ghost Dog]

Wed Jan 16, 2:38 PM ET

WASHINGTON (AFP) - The US subprime mortgage crisis will likely produce deeper problems than expected because not all market players have "come out clean" about their losses, the International Monetary Fund said Wednesday.

"Some analytical work modeled on conservative assumptions suggests that potential losses may be higher and further capital injections are likely," Manmohan Singh and Mustafa Saiyid wrote in an IMF report.

"Most banks in the United States have not yet marked their assets to genuine transaction prices," the report said.

Some market participants "have come out clean such as a few US hedge funds that have written off the value of all junior notes issued by its structured vehicles," the report said.

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