Comments on: Lessons from Sweden http://www.irisheconomy.ie/index.php/2009/04/15/lessons-from-sweden/ Wed, 16 May 2012 23:19:24 +0000 http://wordpress.org/?v=2.6.3 By: The Irish Economy » Blog Archive » Lundgren in Dublin and A Proposal Relating to NAMA http://www.irisheconomy.ie/index.php/2009/04/15/lessons-from-sweden/#comment-10092 The Irish Economy » Blog Archive » Lundgren in Dublin and A Proposal Relating to NAMA Tue, 07 Jul 2009 22:13:03 +0000 http://www.irisheconomy.ie/?p=1774#comment-10092 [...] have written before about the incisive and articulate contributions of Bo Lundgren, the Swedish Finance Minister in [...] [...] have written before about the incisive and articulate contributions of Bo Lundgren, the Swedish Finance Minister in [...]

]]> By: John Gerard http://www.irisheconomy.ie/index.php/2009/04/15/lessons-from-sweden/#comment-5473 John Gerard Thu, 16 Apr 2009 22:00:20 +0000 http://www.irisheconomy.ie/?p=1774#comment-5473 @Patrick - thanks for these interesting pieces. It seems that two factors are important in achieving their aims which are relevant for us. (1) An easily liquefiable asset (such as real estate) which arguably we have (2) lack of political interference. It is on the second point where we fall down. Not because of any real risk of government conivance in protecting their mates BUT because of the public perception that any restructuring or work out is akin to bailing out the builders and friends of FF. As many other contributors on this site have said NAMA will have no choice to but work out and restructure these loans unless they want to lose what ever remaining value is in these assets. So I wonder will NAMA be able to withstand the public lack of understanding and appreciation of this standard corporate recovery-restructuring process. @Patrick - thanks for these interesting pieces. It seems that two factors are important in achieving their aims which are relevant for us. (1) An easily liquefiable asset (such as real estate) which arguably we have (2) lack of political interference. It is on the second point where we fall down. Not because of any real risk of government conivance in protecting their mates BUT because of the public perception that any restructuring or work out is akin to bailing out the builders and friends of FF. As many other contributors on this site have said NAMA will have no choice to but work out and restructure these loans unless they want to lose what ever remaining value is in these assets. So I wonder will NAMA be able to withstand the public lack of understanding and appreciation of this standard corporate recovery-restructuring process.

]]> By: Patrick Honohan http://www.irisheconomy.ie/index.php/2009/04/15/lessons-from-sweden/#comment-5336 Patrick Honohan Wed, 15 Apr 2009 19:25:25 +0000 http://www.irisheconomy.ie/?p=1774#comment-5336 If you're interested in the (very mixed) experience of Asset Management Company in countries other than Sweden, three basic papers are: <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=282518" rel="nofollow">Klingebiel's early piece</a>, and Fung et al. on <a href="http://www.bis.org/fsi/fsipapers03.htm" rel="nofollow">Asian AMCs post 1998</a>. Note that most -- but not all -- of these AMCs were dealing with nationalized banks. Of course, not having to negotiate with shareholders and other creditors makes it easier to do the asset purchase, though that is hardly a slam dunk case for nationalization. If you’re interested in the (very mixed) experience of Asset Management Company in countries other than Sweden, three basic papers are: Klingebiel’s early piece, and Fung et al. on Asian AMCs post 1998.

Note that most — but not all — of these AMCs were dealing with nationalized banks. Of course, not having to negotiate with shareholders and other creditors makes it easier to do the asset purchase, though that is hardly a slam dunk case for nationalization.

]]> By: Gregory Connor http://www.irisheconomy.ie/index.php/2009/04/15/lessons-from-sweden/#comment-5310 Gregory Connor Wed, 15 Apr 2009 16:42:56 +0000 http://www.irisheconomy.ie/?p=1774#comment-5310 Related to my earlier comment, note that according to the NY Times the US administration has decided to release the results of their stress tests of all the major banks. Irish policymakers should do the same --- it would be a very positive move, following the "greatest possible transparency" strategy of Lundgren and the Swedish crisis managers. Related to my earlier comment, note that according to the NY Times the US administration has decided to release the results of their stress tests of all the major banks. Irish policymakers should do the same — it would be a very positive move, following the “greatest possible transparency” strategy of Lundgren and the Swedish crisis managers.

]]> By: Gregory Connor http://www.irisheconomy.ie/index.php/2009/04/15/lessons-from-sweden/#comment-5308 Gregory Connor Wed, 15 Apr 2009 16:38:42 +0000 http://www.irisheconomy.ie/?p=1774#comment-5308 The following sentence in Lundgren's testimony resonates deeply in comparing the Swedish response to the Irish response in a similar financial crisis: "One key objective was to ensure that our crisis management would be characterised by the greatest possible transparency." This is one lesson (among many) that Irish policymakers could learn from the successful Swedish crisis resolution. Thanks for the excellent link. The following sentence in Lundgren’s testimony resonates deeply in comparing the Swedish response to the Irish response in a similar financial crisis:

“One key objective was to ensure that our crisis management would be characterised by the greatest possible transparency.”

This is one lesson (among many) that Irish policymakers could learn from the successful Swedish crisis resolution.

Thanks for the excellent link.

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