ABSTRACT

U.S. Financial Crisis: Lessons from Sweden [September 29, 2008]   [open pdf - 71KB]

This Congressional Research Service (CRS) report "provides an overview of the Swedish banking crisis and an explanation of the measures Sweden used to restore its banking system to health." The lessons from Sweden could help resolve the current financial crisis in the United States. "Some analysts and others argue that Sweden's experience could provide useful lessons for the execution and implementation of the Emergency Economic Stabilization Act of 2008. The banking crisis facing the United States is unique, so there are no exact parallels from which to draw templates. Sweden's experience, however, represents a case study in how a systemic banking crisis was resolved in a developed country with democratic institutions. The Swedish central bank separated out good assets, which it left to the banks to oversee from bad assets, which it placed in a separate agency with broad authority to work out debt problems or to liquidate assets. Four lessons that emerged form Sweden's experience are: 1) the process must be transparent; 2) the resolution agency must be politically and financially independent; 3) market discipline must be maintained; and 4) there must be a plan to jump-start credit flows in the financial system."

Report Number:
CRS Report for Congress, RS22962
Author:
Publisher:
Date:
2008-09-29
Copyright:
Public Domain
Retrieved From:
Via E-mail
Format:
pdf
Media Type:
application/pdf
URL:
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