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Transaction bankingAugust 29 2010

Bank crisis: Payback time

The world has come a long way since the lurid headlines of 2008 warning that support for the banking sector would cost governments around the world trillions of dollars. While dangers still persist, money is steadily starting to return to government coffers. Writer Geraldine Lambe, Research Geraldine Lambe and Guillaume Hingel
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Bank crisis: Payback time

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In November 2008, ABC News warned US taxpayers that government support for the country's financial sector would cost up to $7500bn. It cited figures from macroeconomic analysis firm Bianco Research showing that, in 2008 dollars, the cost of the bailout would be more than the combined costs of the Marshall Plan, the Louisiana Purchase, the Korean War, the Vietnam War and the entire historical budget of NASA, including the moon landing. Other, less sensational figures from that month still put the cost of the US government's intervention in the financial system at $3500bn, representing about 25% of the goods and services produced in the country in 2007.

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