Is Sweden A Good Model? : Planet Money An official from Sweden argues the U.S. should nationalize banks, but not exactly the Swedish way.
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Is Sweden A Good Model?

Have you been hearing this idea, from President Obama and others, that Sweden is the model to follow (not exactly what Obama said, but others have)?

I just had a great conversation with Leif Pagrotsky. He's a Swedish politician who was in government when they had their banking crisis. He wrote a great note on how Sweden's experience is not that close to ours.

Some highlights from the talk (which will come to you in the podcast soon):

- The first big bank to collapse, Nordbanken, was already government owned—they had owned it for years. So when it failed it wasn't an issue of the government taking over a private company, it was a bank being rescued by its biggest shareholder, which happened to be the government.

- Only one other bank was nationalized, a relatively small one. This is very much unlike the U.S. nationalizing several of the largest banks in the world.

- Pagrotsky says Sweden's history of government-managed banking is mixed. Up until the early 1990s crisis, Sweden's government was pretty lousy at managing a bank. In fact, he says, the government's bad management CAUSED the crisis to begin with. But after the mid-1990s and right through today, the government, he says, has done a great job with Nordbanken's successor: Nordia.

For what it's worth, Pagrotsky thinks the U.S. should nationalize several of the big U.S. banks. He just doesn't think Sweden is a perfect model for how to do this.