IMF: US financial system could need $76bn in capital

30 July 2010

US banks may need to raise as much as $76 billion in capital, the International Monetary Fund (IMF) has warned.

Its report stated that America's banking system is currently stable, but remains vulnerable because of concerns over potential risks in areas such as house prices and commercial real estate loans, reports Bloomberg.

Christopher Towe, the IMF's deputy director of monetary and capital markets, said: "We are particularly concerned about the situation among the small and medium-sized banks, which are most heavily exposed to the commercial real estate sector."

He added that while the IMF broadly supports the Dodd-Frank legislation, it was concerned about the "complex" nature of the regulatory regime and said that it would have favoured a bolder streamlining process to reduce the number of agencies involved.

Earlier this week, the IMF warned China that it needs to carefully manage its banks' potential exposure to bad loans, with greater regulatory vigilance needed in managing credit quality.

By Gary Cooper

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