Global credit losses stemming from the current market turmoil will reach US$1.2 trillion, according to Goldman Sachs.

Wall Street will account for nearly 40 per cent of the losses.

Goldman Sachs economists have released a paper to say US leveraged institutions, which include banks, brokers-dealers, hedge funds and government-sponsored enterprises, will suffer most in credit losses.

Goldman estimated US$120 billion in write-offs have been reported by these leveraged institutions since the credit crunch began last summer.

Of the cumulative losses expected by these leveraged players, bad residential home loans will represent about half, while poor-performing commercial mortgages will represent 15 per cent to 20 per cent.