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The Swedes Didn't Use Receivership

By Anonymous

Paul Krugman has been pushing the Swedish model hard, so it's more than a little troubling that to discover that he doesn't understand what Sweden actually did:

I was not saying ?nationalize all the banks?; I was saying do what the Swedes did ? in tandem with a guarantee on bank liabilities, take the banks with zero or negative capital into receivership.

Yikes. Sweden never put its banks in receivership. It nationalized the banks by becoming the majority owner of each bank?that is, the government bought well over 50% of the banks' equity.

Further proof that "academic economist" isn't the same thing as "banking/financial markets expert." Journalists be advised.

Full post as published by Economics of Contempt on March 11, 2009 (boomark / email).