The bill? $11.4 trillion
How much have governments committed for bailing out banks and financial institutions? $11.4 trillion, according to OECD estimates . That’s a lot of money – equivalent to the 2007 GDP of Japan, the United Kingdom, Germany and France combined. Or, as Dow Jones explains, about $1600 for every man, woman and child on the planet.
But that number needs to treated with a little caution. In effect, it represents a worst-case scenario for governments based on their current commitments.
$1600 for every man, woman and child on the planet
For example, it includes the cost of government guarantees, some of which will never be called on. It also includes the cost of purchasing assets and equity, the value of which may go up (or down). Because the job of supporting the banks is still a work in progress, the final cost won’t be known for years.
Of course, governments may still need to make fresh commitments in order to support banks. But assuming they don’t, the final bill could well be lower.
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