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The US Federal Reserve is examining the Nordic bank nationalisations of the 1990s as a possible interim solution to the US financial crisis.
Norway ensured that shareholders of insolvent lenders received nothing and the senior management was entirely purged. Two of the country's top four banks - Christiania Bank and Fokus - were seized by force majeure.
It feels like the Fed is throwing bricks through our windows while promoting their glass repair service.
Norges Bank Conference on Banking Crisis Resolution - Theory and Policy, Oslo 16 June 2005
The Norwegian Banking Crisis affected almost 2/3 of the banking system and led to the nationalization of our three largest banks. At the time, it was the first systemic crisis in an industrialized country since the 1930s. This also explains why the crisis caught most policymakers off-guard.
How could this happen in a well organized, mature economy? How was the crisis resolved? And, what can we learn from the crisis resolution methods adopted in Norway? These are the questions I will address today.