“The 2007-2009 financial crisis, like past financial crises, was associated with not only a steep decline in output but also the most severe economic downturn since the Great Depression of the 1930s,” the report read. The toll on economic output may be as much a $13 trillion—an amount equal to a year’s GDP. Paper wealth lost by homeowners equaled $9.1 billion.
The report was published as part of a cost-benefit analysis of the Dodd-Frank financial reform law of 2010. The office tried to determine whether the costs of implementing that law would be greater or lesser than that of another economic crisis.
“If the cost of a future crisis is expected to be in the trillions of dollars, then the act likely would need to reduce the probability of a future financial crisis by only a small percent for its expected benefit to equal the act’s expected cost,” the GAO concluded.