The worse of the financial crisis is yet to come and its effects will be seen on a global scale over the next couple of years, experts of Unicredit Global Research told Dnevnik daily.
The economy is now seeing direct losses from cauterized debt obligations and the spill-over
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effects on the real economy are yet to emerge, forecast Jochen Felsenheimer, analysis head at the Credit Strategy & Structured Credit Research department of Unicredit Global Research.
Felsenheimer said the main risk is still concentrated in the banking system on a global scale with the projections on the total losses from the crisis varying. The IMF estimated them at USD 1.0 trillion.
Such crises which are duly compared to the Great Depression always have spill-over effects to the real economy, said Thorsten Weinelt, analysis chief at Unicredit Global Research.
The need for capital and the shrinking leverage expositions are prompting banks to tighten lending standards, which will negatively impact on consumers and the corporate sector, according to the experts.
Source: Dnevnik, PXII
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