Okay, not really Ikea, but the land where Ikea was born: Sweden. Bruce Strokes has an interesting article on how Sweden faced a similar crisis to what the US is facing now back in the early 90s. You need to read the whole thing, but here is a peek:
In the early 1990s, Sweden experienced the worst financial crisis suffered by any industrial country since the Depression. The Swedish banking collapse wiped out fortunes, cost taxpayers a staggering amount of money, and may have permanently reduced the country’s standard of living.
Sweden’s response to its banking problems was bipartisan, transparent, massive, and, above all, fast. And the principal lesson, according to Stefan Ingves, head of the Swedish Central Bank, was: “You cannot rely on the private sector or markets alone to solve systemic banking problems.” During the crisis, Ingves ran the Swedish Bank Support Authority, which was charged with resolving many of the bad loans.
As with the U.S. savings and loan crisis in the 1980s and today’s subprime mortgage fiasco, Sweden’s banking problems were triggered by desirable but poorly managed deregulation. The loosening of financial-sector rules led to a rapid expansion of credit followed by a boom in real estate prices that eventually crashed.
Read on to see how the Swedes solved the problem and what it might teach American politicians.
Cross posted at the Square Deal