The paper says according to IMF calculations, 7 per cent of the Euro 1.73 trillion (£1.5 trillion) of consumer debt in Europe will not be repaid. The group noted that the UK would be affected heavily by the losses as it has the most indebted credit card holders on the continent.
The IMF estimates of the £1.16 trillion ($1.91 trillion) of US consumer debt, 14 per cent will be lost.
Petya Koeva Brooks, of the IMF research department said in a recent IMF report that the losses in household wealth during 2008 were about £6.68 trillion ($11 trillion) in the United States and were estimated at £911bn in the United Kingdom, of which £365bn are financial assets and £546 in housing assets.
He says: “During the first three quarters of 2008 alone, the value of household financial assets decreased by about 8 per cent in the United States and the United Kingdom, by close to 6 per cent in the euro area.”