Gillian Tett at FT:

“As more toxic assets keep emerging, public confidence in the financial system keeps crumbling afresh. Little wonder. After all, the only thing more scary than the current scale of today’s banking woes is that, a full two years after subprime defaults got under way, policymakers and bankers alike remain confused about just how big the toxic rot really is, let alone when it might end.

That is no accident. One dirty secret that hangs over Thursday’s meeting is that there is still precious little global consensus about how to tackle the toxic woes. Some countries (such as the US) are trying to persuade banks to sell their bad assets; others (such as the UK) are trying to “insure” the banks against losses instead.

Meanwhile, several governments in continental Europe seem to be just holding their breath – and praying that the problem will magically disappear.”

The IMF currently estimates world banking losses at $2.2 Trillion.  Rumors are now circulating that number will soon be revised.  As the world economy get worse, more assets begin to fall into the “toxic” category.