Why the Norwegian Bank Crisis of 1988 is Important!
by arendt
Tue Sep 23, 2008 at 05:42:26 AM PDT
During a lunchtime discussion, a European at our company pointed out that Norway had faced a banking crisis similar to ours twenty years ago; but that they had survived it at minimal cost. Sure enough, when I Googled it, I discovered:
Special features of the Norwegian banking crisis
The Norwegian banking crisis was a classic boom-bust crisis with some special, national features:
• Deregulation and liberalization paved the way for the boom
• Macroeconomic policies were largely pro-cyclical
• Lending growth became exceptionally strong
• Prudential capital regulations were relaxed (and)
• Supervision efforts were reduced
This may sound like "a deadly cocktail" (which in fact it turned out to be)
http://www.norges-bank.no/... arendt's diary :: ::
My colleague also pointed out that the Paulson plan is taking exactly the opposite approach to the Norwegian response, which had a successful resolution.>>>>snip
http://www.dailykos.com/story/2008/9/23/82912/0254Myths & Facts About Swedish Bank "Rescue"
Since I am from Sweden while most of my readers aren't, and since the bail-out of Swedish banks by the Swedish government in many American media reports have been said to be essentially the same as the bail-out propsed by Hank Paulson, and since this bail-out in these same media allegedly was a big success, I have recently received questions about it.
The truth is that first of all that the Swedish solution was much better than the plan proposed by Paulson or for that matter the Democrats. And secondly, while the plan was better than the ones proposed in Washington, it wasn't as big of a success as it is often asserted.
The background to the Swedish banking crisis was a ill-timed "deregulation" in 1985, where Swedish commercial banks were permitted to lend as much as they wanted in a time
http://stefanmikarlsson.blogspot.com/2008/09/myths-facts-about-swedish-bank-rescue.html