+- MacResource (https://forums.macresource.com)
+-- Forum: My Category (https://forums.macresource.com/forumdisplay.php?fid=1)
+--- Forum: 'Friendly' Political Ranting (https://forums.macresource.com/forumdisplay.php?fid=6)
+--- Thread: Stopping a Financial Crisis, the Swedish Way (/showthread.php?tid=62866)
Stopping a Financial Crisis, the Swedish Way - maco - 09-26-2008
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.
That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well.
“If I go into a bank,” said Bo Lundgren, who was Sweden’s finance minister at the time, “I’d rather get equity so that there is some upside for the taxpayer.”
Sweden spent 4 percent of its gross domestic product, or 65 billion kronor, the equivalent of $11.7 billion at the time, or $18.3 billion in today’s dollars, to rescue ailing banks. That is slightly less, proportionate to the national economy, than the $700 billion, or roughly 5 percent of gross domestic product, that the Bush administration estimates its own move will cost in the United States.
http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html?_r=3&partner=rssnyt&emc=rss&oref=slogin&oref=slogin&oref=slogin
Re: Stopping a Financial Crisis, the Swedish Way - robfilms - 09-26-2008
maco-
there was a piece about this on npr.
i hope the same folks that brought us iraq, will find a way to quit selling "fear & the flag" and start thinking of something more than their own political and/or financial enrichment.
thanks for the post
be well
rob
Re: Stopping a Financial Crisis, the Swedish Way - maco - 09-26-2008
I hope that some of the Washington DC crowd read the article.
Re: Stopping a Financial Crisis, the Swedish Way - vision63 - 09-26-2008
They're not and they won't.
Re: Stopping a Financial Crisis, the Swedish Way - kap - 09-26-2008
The Swedish government officials weren't thinking of themselves. In the US it is all about self-entitlement.
Re: Stopping a Financial Crisis, the Swedish Way - kap - 09-26-2008
Isn't this the same plan that the House Republicans have in mind right now?
Re: Stopping a Financial Crisis, the Swedish Way - Seacrest - 09-27-2008
http://www.youtube.com/watch?v=R1X6RQLZtoA
Re: Stopping a Financial Crisis, the Swedish Way - Blurb - 09-27-2008
kap wrote:
Isn't this the same plan that the House Republicans have in mind right now?
Except, the repubs also include personal and corporate tax cuts in their plan! Tax cuts! WTF?? When I read the first part of their plan I thought it was an excellent idea. Then I got to the 2nd and 3rd parts of plan, which are the tax cuts, and I thought :ftw: