Banks worldwide have written down around USD 1,400 billion. This blew big holes in their capital base, and in order to uphold confidence in the sector, governments rigged up extensive support programmes. Some USD 500 billion was pumped into the banks, while bank debts and asset risks were guaranteed and deposit guarantees were extended.
Large amounts were required to stabilise institutions, relative to GDP especially in Ireland, Belgium and the UK. Real economy hit hard 7. The current economic downturn is deeper, more prolonged and more widespread than those occurring after 15 previous crisis periods in history, according to a multi-country study by Reinhart and Reinhart (2010). This reflects the radical deleveraging in the financial system.