European banks are less than a fifth of the way to reaching the total figure of writedowns and credit losses they will need to report before stability returns to the beleaguered banking sector, according to the International Monetary Fund, putting them far behind their US peers on the road to recovery.

In its global financial stability report, released yesterday, the IMF predicted that banks will report writedowns and losses of $4.1 trillion (€3.1 trillion) linked to the financial crisis.