Can the U.S. learn any lessons from Sweden's banking bailout?

[maddezmom]

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, which was so far in the hole in 1992 - after years of imprudent regulation, shortsighted macroeconomic policy and the end of its property boom - that its banking system was, for all practical purposes, insolvent.

But unlike the United States, whose Treasury has made a proposal to deal with a similar situation, Sweden did not just bail out its financial institutions by having the government take over the bad debts. It also clawed its way back by pugnaciously extracting equity from bank shareholders before the state started writing checks.

That strategy kept banks on the hook while returning profits to taxpayers from the sale of distressed assets by granting warrants that turned the government into an owner. Even the chairman of Sweden's largest bank got a stern answer to the question of whether the state would really nationalize his bank: Yes, we will.

"If I go into a bank," Bo Lundgren, Sweden's finance minister at the time, said, "I'd rather get equity so that there is some upside for the taxpayer."

more:http://www.iht.com/articles/2008/09/22/business/krona.php?pass=true

[marmar]

1. Difference is, in Sweden, they seem to actually give a damn about everyday people....

.... Not here.

[CitizenPatriot]

2. Um, NO.

this plan does not involve a move to take power away from the government and people and put it into the hands of a few, unelected officials.

What were they thinking? This is sane and real, restores confidence and demands accountability.

No can do here in the good old US of A.

[BridgeTheGap]

4. They want no regulation, no accountability...they only want the money! n.t

[UK populist]

3. No this is much worse than Property bubble alone

The main problem is the derivatives markets which has grown to the size of at least 15-20 times global GDP.
These derivatives were built on confidence and when there is no confidence they start to default. If they reach critical mass the whole market of them will be worthless pieces of paper.
It is very wrong to equate this meltdown with any of the property meltdowns of Sweden, Japan or any others.

[Karenina]

5. Norway's crisis in 1988

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4059977