Are Swedish 1990 crisis lessons relevant today?
This is an oldish post by Lars Jonung (March 2009). So those who have not read it could look at it. It has some excellent insights from the Swedish crisis. He says there are 7 key points of Sweden 1991 crisis model: • Political unity • Blanket guarantee of bank deposits and liabilities • Swift policy action • An adequate legal framework based on open-ended funding • Full information disclosure • Differentiated resolution policy to maintain the banking system and prevent moral hazard • The role of macroeconomic policies in ending the crisis For details see his paper on the same. What are lessons for today? On a very general level, the similarities are striking. The two crises are both financial crises driven by identical forces – a boom fuelled by lax monetary policy and negligent financial oversight, later turning into a bust. On the other hand, there are considerable differences. The Swedish crisis of the early 1990s was primarily a local phenomenon, or – more accurately – a Nordic on
