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WHILE the costs of financial crises are all too evident in debtor markets, how much do bailouts really cost creditor countries? The question is particularly pertinent in light of the recent German Constitutional Court hearings regarding the legality of the European Central Bank's outright monetary transactions and the renewed concern that Greece may require further financial assistance.mini storageJust as banking crises tend to entail transfers of risk from the private to the public sector, sovereign debt crises involve supranational bodies such as the International Monetary Fund or, in the case of the European debt crisis, the ECB. Attention, though, tends to focus on the headline numbers involved - the money at risk - much more than on the likely, or indeed ultimate, net cost to the provider of financial support.It is instructive to reflect on those net costs in OECD countries and to distinguish between governmental interventions - such as guarantees, equity stakes or nationalisation of institutions - and central bank activity - such as liquidity support, loans or asset purchases - as lenders of last resort.Evidence for government guarantees and equity ownership is mixed, though costs generally prove less onerous than initially feared:During the Nordic banking crisis in the early 1990s, the net cost to Finland was around 9 per cent of its GDP - somewhat less than the 13 per cent gross fiscal cost.The US Treasury's stake in AIG yielded a US$5 billion gain, and its investments in Citigroup and Bank of America a further US$4.5 billion.In the UK, the government's investment in Lloyds Banking Group is now close to breakeven. Th迷你倉 government made a ¢G5 billion (S$10 billion) profit on RBS's participation in the Asset Protection Scheme.By contrast, the record of central banks as a lender of last resort is better, with bailouts typically ending up profitable:The Hong Kong Monetary Authority bought HK$118 billion (S$19 billion) of assets in 1998, including a 10 per cent stake in HSBC. It eventually made a gain of HK$90 billion.The US Treasury's stake in AIG yielded a US$5 billion gain, and its investments in Citigroup and Bank of America a further US$4.5 billion.The Fed's purchase of nearly US$30 billion of Bear Stearns assets in 2008 generated US$6.6 billion. Fed loans to and asset purchases from AIG added US$17.7 billion.The Bank of England's Special Liquidity Scheme generated ¢G2.3 billion. Likewise, the BOE's Asset Purchase Facility, which has accumulated more than ¢G31 billion, is expected to result in net gains in all but one of its published scenarios.The ECB acquired 276 billion euros (S$467 billion) in assets between 2009 and the end of 2011. These programmes should generate a net gain of 70-80 billion euros.Viewed in this light, the lender of last resort plays a critical yet ultimately profitable role in the face of banking or sovereign debt crises. Should Greece require further financial assistance involving public participation for the first time, then at least some of the cost would be made good by the proceeds of the ECB's earlier programmes. If this was better understood, then perhaps the popular opposition to, and the public discourse on, bailouts would be tempered.The writer is Allianz Global Investors' (AllianzGI) Global CIO文件倉