IMF Warns EU Debt Crisis Could Hit US Banks |
| Wall Street Journal - Jan 24, 2012 |
The U.S. economy is susceptible to a range of shocks from the euro-zone crisis, including attacks on the financial sector, the International Monetary Fund warned Tuesday in its Global Financial Stability Report.
While the U.S. Treasury Department has outlined trade exposure as a major risk, it has downplayed the banking sector's vulnerability to the euro zone's problems.
But, the IMF said, the "potential spillovers could include direct exposures of U.S. banks to euro-area banks, or the sale of U.S. assets by European banks."
Jose Vinals, head of the IMF's Monetary and Capital Markets Department, said global financial stability is in a "danger zone."
"A misstep or failure to address underlying tensions could precipitate a global crisis with great economic and social consequences," he said.
For an example of U.S. exposure, the IMF pointed to commercial-backed mortgage security and asset-backed security markets, which have been under pressure in recent months, weighed down by the volume of European asset sales.
Read Full Article from Wall Street Journal
- Posted: 2012-01-24 15:23:58
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