Scandinavian Working Papers in Economics
SSE Working Paper Series in Economic History,
Stockholm School of Economics
No 2013:1: The State as Last Resort in two Scandinavian Banking Crises: A comparative case study of Denmark and Sweden
Hans Sjögren () and Martin Jes-Iversen ()
Additional contact information
Hans Sjögren: Institute for Economic and Business History Research, Postal: Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden
Martin Jes-Iversen: Centre for Business History, Postal: Department of Management, Politics and Philosophy, CBS, Porcelænshaven 18A, DK-2000 Frederiksberg, Denmark
Abstract: This article treats the role of the state in bailouts, i.e. government objectives and measures during financial crises. The purpose is to unveil to what extent the acting of the state differed in the latest crises in Denmark and Sweden, and critically analyse which objectives justified setting up organisations for financial stability. We compare intrinsic principles and perceptions for government intervention, with a focus on bailouts and state-owned banks. We argue that reasons for observed differences in the implementation of measures in Sweden and Denmark date back to the early phases of capitalism in the 19th century, i.e. is part of an historical institutional pattern. The similarities shown are limited to the bailouts schemes, and indicate that there is a common international standard for a public-private arrangement concerning financial stability. Our results relate to the discussion of launching effective and legitimate state policies after a severe financial crisis.
Keywords: Banking crises; Financial history; Government intervention; Bailout; State-ownership.
JEL-codes: N24
23 pages, December 20, 2013
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