Economic Recovery Won’t Be Enough for 25% of Banks, IMF Says
- Some lenders will remain weak even when growth picks up
- Banks need to get rid of bad loans, reduce branches to improve
Buildings stand in the Marunouchi area at dusk in Tokyo.
Photographer: Tomohiro Ohsumi/BloombergThis article is for subscribers only.
A global economic recovery would still leave about a quarter of banks in developed countries too weak to support further growth and susceptible to future shocks, the International Monetary Fund said.
Banks controlling about $12 trillion of assets would remain vulnerable during a rosy economic environment marked by faster economic activity, rising interest rates and declining defaults, the IMF said Wednesday in its semiannual report on financial stability. Most of those banks, with $8.5 trillion in assets, are in Europe, according to the report.