Mastering the Financial Crisis

The Swedish Approach

Abstract

This article primarily aims at describing the Swedish handling of the 2008– 2009 financial crisis but also presents some relevant contextual elements and makes some qualitative remarks. Finally some conclusions are drawn.
Sweden has gone through two periods of serious financial distress during the past 20 years. Accordingly there should be plenty of experiences to draw from. As a backdrop the fundamentals of the crisis of the early 1990s and the way it was handled are presented. That crisis still influences Sweden, both in the way it affects people (and perhaps institutions) and in the way the recent crisis was handled legally. The main part of this article is an attempt at a straightforward account of events during this crisis. A naked account of events is of little value if there is no context to interpret it against. Therefore, supplementary figures regarding the financial sector and the institutional set up are presented.
When it comes to the solutions used to tackle the crisis the account at times goes into detail for several reasons. The details of the technical solutions used are of importance, since the devil is in the details also or perhaps particularly, in this area. Another reason is that problems during a crisis always arise in unexpected ways and accordingly have to be solved in a particular way. Remembering that and giving an account of the different situations add to the full picture. Finally, details add an invaluable flavor.