The global credit crisis remains a significant threat to economic growth, despite recent improvement, according to the International Monetary Fund.

“Financial markets remain under considerable strain, now compounded” by the slow economy and widespread efforts to unload debt, the fund said.

Financial losses stemming from the U.S. mortgage and credit crises could reach $1 trillion, the IMF said, with $565 billion stemming from the residential mortgage market and the remainder from commercial real estate, consumer credit and corporate debt markets.

"The deterioration in credit has moved up and across the credit spectrum to prime residential and commercial mortgage markets, and to corporate credit markets," Jaime Caruana, director of the IMF's Monetary and Capital Markets department, told the Associated Press.

Investments by government-run investment funds and sovereign wealth funds have helped, but more may be needed to restore the lending capacity of major banks, Caruana said. In late 2007 and early 2008, funds from China, Singapore and the Middle East have invested more than $40 billion in Citigroup Inc., Merrill Lynch & Co. Inc. and the Swiss bank UBS.

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