The failed attempts to restore or banking system to health have been met with criticism and calls to adopt the so-called Swedish Model, which would entail massive writedowns, wipeouts and capital injections. We’ve been talking about it for a while, and its gotten increasing play in the media.
But it looks like Sweden itself is trying the US model of capital injections
CNBC: The Swedish government is set to present in the coming weeks a program under which state capital could be injected into the country’s banking sector, a newspaper reported on Tuesday without disclosing its sources.
The centre-right coalition government has said it is considering various measures under which the country’s banks might receive capital boosts to ensure they can meet the borrowing requirements of Swedish companies and households.
Maybe they’re just not there yet. If things are bad, but not horrible, then perhaps the nuclear option would be a bit premature.
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