Banking Crises: lessons from Sweden and Norway

This note brings together narratives of two banking crises in Sweden and Norway in the early 1990s and describes the remedial action taken by central governments. It was of interest at the time of the UK and global financial crisis in 2008. the Swedish crisis began with rapidly rising asset prices. when tighter monetary controls were introduced it cuased problems for the main banks. Swift action by the central bank guaranteeing deposits but not shareholder equity is thought to have been a good explanation for the relativley limited cost of the rescue.