Stopping a Financial Crisis, the Swedish Way

[Guy Whitey Corngood]

A banking system in crisis after the collapse of a housing bubble. An economy hemorrhaging jobs. A market-oriented government struggling to stem the panic. Sound familiar?

It does to Sweden. The country was so far in the hole in 1992 — after years of imprudent regulation, short-sighted economic policy and the end of its property boom — that its banking system was, for all practical purposes, insolvent.

But Sweden took a different course than the one now being proposed by the United States Treasury. And Swedish officials say there are lessons from their own nightmare that Washington may be missing.

Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government.


http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html






This article is from 2008. I have to admit that I'm practically illiterate when it comes to finances. So I'm hoping that some of you who actually understand the stuff can discuss the article...... On edit apparently I can't spell "illiterate" either.

[avaistheone1]

1. I hope Obama and the Treasury will opt for the Swedish way.

The path we are on is not working in terms of the banks.

[Blue_Tires]

2. ttt

[FrenchieCat]

3. The differences are so vast between Sweden and the United States

until it ain't even funny.

Trying to make the complex appear simple is no better when done by the Left than when it is done by the Right.