The Swedish model for resolving the banking crisis of 1991-93

Lars Jonung at the European Commission has released a new paper on this topic: you can download it here.

Abstract: This study presents the main features of the Swedish approach for resolving the banking crisis of 1991-93 by condensing them into seven policy lessons. These concern (1) the importance of political unity behind the resolution policy, (2) a government blanket guarantee of the financial obligations of the banking system, (3) swift policy action where acting early was more important than acting in exactly the right manner, (4) an adequate legal and institutional framework for the resolution procedures including open-ended public funding, (5) full disclosure of information by the parties involved, (6) a differentiated resolution policy minimizing moral hazard by forcing private sector participants to absorb losses before government financial intervention, and (7) the proper design of macroeconomic policies to simultaneously end the crisis in both the real economy and the financial sector.

Trichet on Competitiveness

His IIEA lunchtime speech today is available here.

The Irish Strategy for the Banking Sector

It is interesting to read the Minister of Finance’s Dail statement that lays out the strategy behind the government’s approach to the banking sector:  you can read it here.

How to Create a European Financial Stability Fund

Daniel Gros has a new VOX article describing how the EIB can be used to set up a European Financial Stability Fund: you can  read it here.

Brendan Keenan Broadly Agrees with Peter Sutherland

Brendan Keenan’s article today converges on a similar analysis: you can read it here.