Sweden’s rescue plan

I had posted about lessons from Sweden’s Banking crisis of 1992. However, the crisis has engulfed Sweden banking system as well. The linkage is less via the financial channel as in the case of India and others but via an indirect trade channel.

Basically Sweden Banks have lent big time to Baltic region. Baltic region  has grown previously on account of its exports to European developed countries. Now with European developed countries in near recession, the Baltic region has slowed. This is expected to increase non-performing assets in Sweden Banks’ books and concerns over Sweden’s Banking system. 

The result is a plan by Sweden Finance Ministry to support its banks.  It is a combination of capital injection, guarantee scheme and stabilisation fund.

Tough times for any economic policymaker. The channels can effect you from anywhere. What do you do?

One Response to “Sweden’s rescue plan”

  1. Stock Forum Says:

    Great information, I will be linking back to you and going to look around at your other posts.

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