The 1994 Mexican problems have cost about 12-15 per cent of GDP; the Nordic countries spent 4-8 per cent of their GDP fixing their problems a few years ago; even the S&L problems in the United States (merely a small sub-group of the financial sector) cost around 3 per cent of GDP to sort out.
But the cost of failing to address these problems decisively can be more painful still -- a long drawn-out period of financial introspection and inertia which severely retards real activity. A positive point is the strong fiscal positions (and therefore low government debt outstanding) of these countries, so the capacity to fund the restructuring exists.