Swedish banking rescue

The Swedish banking rescue followed a housing bubble in Sweden that deflated during 1991 and 1992, and resulted in a severe credit crunch and widespread bank insolvency. The causes were similar to those of the subprime mortgage crisis of 2007–2008. In response, the government took the following actions:

This bailout initially cost about 4% of Sweden's GDP, later lowered to between 0–2% of GDP depending on various assumptions due to the value of stock later sold when the nationalized banks were privatized.

In September 2008, economists Brad DeLong and Paul Krugman have proposed the Swedish experiment as a model for what should be done to solve the economic crisis currently affecting the United States. Swedish leaders who played a role in devising the Swedish solution and have spoken about the implications for other countries include Urban Bäckström and Bo Lundgren.

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