m72mc
Member
- Joined
- Oct 5, 2007
- Messages
- 962
financial crises 92-93, made me remember, perhaps history can tell us some
Sweden's financial crises 92-93. many similarities to the current situation in the US, except for the currency peg.
The Swedish Krona was pegged-For a short period of time, marginalräntan (Sweden's Central Bank rate, this is now the repo) was raised to 500 procent, to defend the SEK, eventually they had to abandon the peg, and have a free floating currency - needless to say the SEK lost A LOT of value. So it was both a bank crises AND a currency crises. This is also true for the us, but since the dollar is free floating it loses a little every day and not all at once..
high increase in real estate values before
real interest rate rose fast before
high inflation before, around 2 percent after the crises
to much debt
unemployment went from 2 % to 10 % -1997 it started to go down
bank crises, the government bailed out the banks, robbed big parts of the pension funds
2 major banks went from private to government ownership
savings went from negative before to about 8 % after
Public debt increased with 1000 billion SEK
value of real estate dropped 50-60 %
Sweden's financial crises 92-93. many similarities to the current situation in the US, except for the currency peg.
The Swedish Krona was pegged-For a short period of time, marginalräntan (Sweden's Central Bank rate, this is now the repo) was raised to 500 procent, to defend the SEK, eventually they had to abandon the peg, and have a free floating currency - needless to say the SEK lost A LOT of value. So it was both a bank crises AND a currency crises. This is also true for the us, but since the dollar is free floating it loses a little every day and not all at once..
high increase in real estate values before
real interest rate rose fast before
high inflation before, around 2 percent after the crises
to much debt
unemployment went from 2 % to 10 % -1997 it started to go down
bank crises, the government bailed out the banks, robbed big parts of the pension funds
2 major banks went from private to government ownership
savings went from negative before to about 8 % after
Public debt increased with 1000 billion SEK
value of real estate dropped 50-60 %
