- Deutsche Bank recently published a chart that looks at the biggest bailouts in history.
- The chart, which presents central bank moves from the 1970s, shows that the 2020 international government bailouts have been the largest in history.
- "What that does to productivity in the future is an open question as to whether we can ever see proper capitalism again with current levels of global debt-GDP," the bank's analysts said.
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International government bailouts in 2020, as a response to the coronavirus pandemic, have been the largest in history, and a chart published by Deutsche Bank Monday shows the truly staggering scale of 2020's interventions.
For 2020, analysts combined the fiscal and monetary relief programs announced by the US and the largest economies in Europe so far as the world battles the coronavirus.
See the incredible scale of the bailouts compared to others since the 70s, many of which barely register, below:
"We won't know how much will be used until much further down the road but these are the main commitments undertaken so far as we see them," the analysts said.
The chart also shows overall G7 debt (private and public) to gross domestic product to indicate that as debt goes higher, so does the level of bailout needed to protect the system.
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In stark contrast to the global financial crisis, the coronavirus pandemic moved the global bailout currency from a massive $10 billion to an enormous $10 trillion figure, analysts showed.
The "prior 20-25 year bailout culture" and extremely low policy rates left economies with higher debt requiring bailout numbers to be just as high on any external shock, analysts said without wanting to put the blame on policymakers.
They added that even without the Covid-19 shock, the next recession would likely require multiple trillion dollars of intervention to protect the current economic system.
"We are once more in too big to fail territory," the analysts said in relation to authorities doing all they can to minimise defaults from the crisis.
"What that does to productivity in the future is an open question as to whether we can ever see proper capitalism again with current levels of global debt-GDP."