As the bad news continues to come in, the global banks are likely to have an even more difficult time. (Santander and other Spanish banks are also very present in Latin America.) Since we can see that the road ahead has issues, we should assume that the US Treasury has drawn up contingency plans for another round of bailouts for the banking industry, just as they had done before the 2008 crisis. This time there can't be another plan that saves the banker lifestyles as there was before.
Since the last IMF update was only a few months ago, who wants to guess how long until the next downgrade? More from Bloomberg on the latest economic crisis.
“The global growth outlook will be somewhat less than we anticipated just three months ago,” Lagarde said in a speech in Tokyo today. “And even that lower projection will depend on the right policy actions being taken.” The new outlook will be announced in 10 days, after an April estimate of 3.5 percent, she said.
Interest-rate cuts in China and Europe yesterday and the Bank of England’s boost to an asset-purchase program underscored the fragility of the global recovery as austerity measures and debt burdens weigh on advanced nations. Lagarde is pressing for fiscal union in Europe to aid growth and financial stability as nations such as Greece wrestle with balancing their books.
The “key emerging markets” of Brazil, China and India are showing signs of slowdown, Lagarde said. Those three countries along with Russia will comprise more than 20 percent of the world economy this year, according to IMF data.
