US outpaces Europe as banks shed bad debt

While European officials have blamed many of their financial problems on the United States, they will soon have to face the music. A new report from the International Money Fund (IMF) indicates that up to $1.2 trillion in additional capital may be needed to fix the mess. And the report says U.S. banks are far ahead of European banks in clearing off bad loans.

The IMF found that financial institutions and investors worldwide stand to lose $4 trillion, with banks set to absorb about two-thirds of those losses. That's the worst since the Great Depression. The IMF also warned of growing credit woes in emerging markets, and the World Bank has announced that it would triple its spending to help developing countries ride out this economic storm.