IMF: Banks Could Encounter Market, Credit Losses As COVID-19 Surfaces ‘Cracks’ In The Financial System

Banking

The International Monetary Fund (IMF) cautioned that COVID-19 has made “cracks” in the worldwide financial system known and “will likely” have financial institutions encounter market and credit losses that will put their reserves to the test. The organization warned that the possibility of a sustained and acute slump will test firms, even though banks have amassed formidable liquidity and capital buffers while having successful stress tests as of the financial crisis of 2007 to 2009, Reuters reported.

    Get the Full Story

    Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

    yesSubscribe to our daily newsletter, PYMNTS Today.

    By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions.

    The IMF wrote in a Global Financial Stability Report that “this crisis presents a very serious threat to the stability of the global financial system.” Wells Fargo and JPMorgan Chase & Co had noted before the release that quarterly profits dropped precipitously as the companies stashed billions to get ready for possibly large quantities of loans in default. 

    The IMF also pointed out emerging stress in the U.S. commercial real estate space while tenants grapple with landlord payments were a point of possible pressure for some financial institutions. Firms have also been drawing down on credit lines, making banks reduce part of their liquidity buffers.

    A drop in the prices for oil could also likely bring about credit losses when it comes to energy lenders, and financial institutions could also have losses on loans to households facing difficulty. 

    As it stands, steps to control the proliferation of the coronavirus have removed trillions off of the worldwide stock markets, put 16 million in the U.S. out of work and may bring about the most severe economic downturn as of the Great Depression.

    And, in separate news, the IMF has reduced growth forecasts in all major economies in addition to the majority of emerging countries in its new World Economic Outlook. Low-income countries in Latin America, Asia and Africa will be particularly hard hit. The worldwide economy is predicted to slump 3 percent this year.

    In addition, the IMF also noted that U.S. unemployment is forecasted to reach 10.4 percent this year and 9.1 percent next year. And the IMF forecast for worldwide GDP growth next year will be 5.8 percent.


    MIT Student Invents Breakthrough Art Restoration Technique

    artwork

    Ever since he was a child, Alex Kachkine has been fascinated by paintings. He would visit museums and was drawn in by the visual art depicted in landscapes, historical figures and religious scenes.

      Get the Full Story

      Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

      yesSubscribe to our daily newsletter, PYMNTS Today.

      By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions.

      “Anytime I visit New York City, the first place I go to is the art gallery,” Kachkine said in an interview with PYMNTS. “It’s been a lifelong passion of mine.”

      Such adoration naturally means Kachkine would look to acquire art works of his own. But with a limited budget, the MIT graduate researcher with a discerning eye instead bought damaged oil paintings he could restore.

      “I ventured into art conservation around 10 years ago when I realized that you can’t buy a Monet reasonably,” Kachkine said. “But you can, even with the limited income I had back then, buy damaged paintings. And I realized that I could take one of those damaged paintings, restore it, and then I would have a really nice painting.”

      Kachkine knew that restoration is manually laborious. The painting has to be cleaned of debris and any past restoration efforts have to be removed as well. Then, the damaged parts in paintings have to be manually painted while staying true to the artist’s style.

      This typically means months to years of painstaking work. Kachkine did it the traditional way at first, but thought there must be a better way. So, he invented a method using artificial intelligence (AI), transfer paper, printers and varnish. His paper describing the technique is published in the journal Nature.

      Kachkine said his method greatly speeds up restoration: In repairing a 2-foot by 2-foot painting, “The Adoration of the Shepherds,” from the late 15th century, he spent 3.5 hours compared to 232 hours it would normally take to do it manually. That’s faster by 66 times.

      Source: “Physical restoration of a painting with a digitally constructed mask,” Nature

      Taking the cleaning time into account, his method would speed up the entire restoration process by four to five times, Kachkine said.

      Around 70% of paintings in institutional collections are not displayed in public due in part of the cost of restoring them, according to Kachkine’s paper. Therefore, restoration efforts typically center around the most valuable pieces of art with the rest left buried in storage.

      Kachkine said various AI models are able to generate images of damaged paintings as they would look fully restored. But these would exist only virtually. He said his technique is the first to translate the digital restored image into physically restoring the actual painting.

      “This is the first time we’ve been able to take all of those digital tools and actually end up with a physically restored painting from them,” he said. “And it’s so much faster than doing these kinds of restorations by hand.”

      How Gen AI Helps Restore Paintings

      The process begins with cleaning the artwork of debris and old restoration efforts. Once cleaned, the painting is scanned to produce a high-resolution image. Kachkine then uses a variety of Adobe-integrated digital tools, including convolutional neural networks and partial convolution models, to reconstruct missing regions.

      Once the digital restoration is complete, a transparent film mask is printed with the reconstructed imagery. This laminate consists of nine ultra-thin layers, including a white backing for color vibrancy and laser-printed pigments. The result is an overlay that sits precisely on the original painting, with printed colors covering only the damaged areas.

      “It’s thinner than human hair,” Kachkine said, adding that the film is removable using standard conservation solvents, preserving the artwork underneath.

      The ethical implications of this method were also central to Kachkine’s design. He developed algorithms that determine which regions to restore based on how human vision perceives color and contrast.

      “We really only select the damages that human vision is sensitive to,” he said. “You can tell what areas have been restored and which have not. That’s really important from an ethical standpoint in conservation.”

      At first, Kachkine said he wasn’t sure how his method would be received. But he was gratified to see broad interest from conservators, cultural institutions and private equity firms. He also has a GoFundMe page.

      Kachkine said he is now collaborating with the Italian Ministry of Culture on restoring frescoes in earthquake-damaged chapels in Tuscany.

      His dream painting restoration job would come from the Italian Renaissance.

      “There are a number of Italian paintings, especially around the Renaissance, that have very bright colors” such as Raphael, Kachkine said. “I’d love to be able to restore one of those [paintings] where before restoration, it would be very difficult to appreciate all of the fun colors that might emerge and the interesting textures that are there.”

      “That’s the dream,” he said. “It might take a little bit before I could get my hands on one, but I’ll keep trying.”

      Read more:

      New AI Startup Turns a Dog’s Bark Into a Human Conversation

      Meta Says Foundation Model Gives Virtual Embodied Agents Human-Like Movements

      AI-Powered Digital Twins Give Clinical Trials a 75-Year Upgrade

      Photo: MIT graduate researcher Alex Kachkine looking at a painting. Credit: Alex Kachkine