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Further subprime losses 'imminent'

28 January 2008 / by None
A top management consultancy has warned that are substantial losses still to come from the subprime and credit crises.

Investors in the financial services industry lost over $1 trillion (£504 billion) last year and Oliver Wyman has said that further losses are in store for the coming year, report Thisismoney.

The group predicts that there could be additional losses of $300 billion as well as the $100 billion already reported.

However, the firm also stated that companies will adapt to the crises which in turn will make them "fitter and stronger", the report continues.

Scott McDonald, head of Oliver Wyman Financial Services, said: "Recent events have exposed failings in certain areas of risk and liquidity management, as well as other excesses that require correction."

He added that in order to progress in the current market climate chief executives will need to be fully aware of potential risks and precautionary measures.

In related news, Sir Howard Davies, the director of the London School of Economics, has said that the Financial Stability Forum should formulate a global response to the current financial crisis.

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