And while the US remains the epicentre of the crisis, the body said in its Global Financial Stability Report that financial institutions in other countries had also been affected.
The IMF's nearly $1 trillion figure includes $200bn in losses that banks have already announced, plus an additional $80bn the banks have yet to write down, officials said.
The US economy has been brought to the brink of recession by the crisis that began with lenders getting into trouble by offering loans to higher-risk borrowers who were unable to pay their mortgages when interest rates went up.
The crisis has also affected international lenders, who bought into or offered sub-prime loans in the US and then contributed to bouts of chaos on international financial markets.
Thousands of US citizens have also had their homes foreclosed during the crisis.
"The deterioration in credit has moved up and across the credit spectrum to prime residential and commercial mortgage markets, and to corporate credit markets," said Jaime Caruana, the director of the IMF's monetary and capital markets department.
Caruana said the losses "suggest a potentially large impact on US economic growth", and that Europe may also see tightening conditions and slowing credit growth under the global financial strain.
The IMF releases its biannual World Economic Outlook on Wednesday and already has said it would cut half a percentage point off its forecast of 2008 global economic growth, to 3.7 per cent.
The unusually harsh biannual report, particularly critical of Wall Street, comes ahead of the IMF and World Bank spring meetings in Washington over the weekend.
The IMF, whose stated mission is to maintain global financial stability, said there was a collective failure to appreciate the extent of debt taken on by a wide range of institutions - banks, insurers, government-sponsored entities and hedge funds.