IMF: Weakness hampering recovery

Political fighting is hampering efforts to restore the battered financial sector, the International Monetary Fund (IMF) warned today, as it estimated the eurozone debt crisis puts banks in danger of losing up to 300 billion euros.

Financial markets have begun to question the ability of political leaders to take the action needed to provide a lasting solution to the economic problems in the eurozone and the US, the IMF said.

The "political weakness" comes as market turbulence from the eurozone, a credit rating downgrade for the US and signs of a global economic slowdown shocked the global financial system, the IMF said.

Elsewhere, the IMF estimated that the sovereign debt crisis in Europe had added 300 billion euros (£261.9 billion) to the risk exposure of banks in the European Union.

PA