World investment banks are set to reveal they have lost about $30 billion from bad debts linked to the global credit crunch, a report says.
 
Analysts are predicting the firms - many of which report quarterly results this week - will have to write-off 10 per cent of the $300 billion loans they have agreed, said the Sunday Times report.

In some cases profits will be almost wiped out, it said.

The report comes ahead of a Federal Reserve meeting which is expected to see a cut US interest rates.

The Fed is tipped to reduce rates from 5.25 per cent by 0.25 or 0.5 percentage points in a move that would be aimed at preventing the downturn in the housing market and the credit crunch from severely denting the US economy.

By making money cheaper to borrow, it is hoped that people would spend and invest more, revitalising the economy.

The results from investment banks including Merrill Lynch and Bear Sterns will provide the first real insight into the impact of the crisis on some of the world's biggest banks.

"The hits will essentially mean that some investment banks will have made almost no money over the last quarter," said Khan Abouhossein, an analyst at JP Morgan. "Profits will be close to zero".

The credit crunch has been brought about largely by troubles in the US housing market where people with low incomes were given mortgages that they have been unable to repay, and have therefore defaulted on.