The number of active ‘toxic assets’ in the balance sheet of banks around the world could reach $4 trillion, according to new forecasts to be issued by the International Monetary Fund (IMF).

The institution headed by Dominique Strauss-Kahn estimated in January that US-originated assets could decline to $2.2 trillion by the end of next year. In its next assessment of the global economy to be published on April 21, the figure can be raised to $3.1 trillion. An addition of $900 billion for toxic assets originated in Europe and Asia can also further build up the figure.

The agreements reached last week in London at the last summit of the G-20 included the enhancement of resources of the IMF. However, some critics see this as representing a ‘mere creation of money’ with potential for inflationary risk. The G-20 leaders agreed last week to increase the resources available to the IMF by up to $750 billion to help struggling economies, thereby tripling the available resources of the institution.

The IMF focuses primarily on efforts that help emerging markets in developing countries withstand the worldwide financial crisis.

According to the IMF: “In recent years, as part of its efforts to strengthen the international financial system, and to enhance its effectiveness at preventing and resolving crises, the IMF has applied both its surveillance and technical assistance work to the development of standards and codes of good practice in its areas of responsibility, and to the strengthening of financial sectors.”

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Via CNBC