Swedish Banking Crisis 1991–1993
Following the November 1985 financial deregulation, the Swedish real-estate bubble burst from autumn 1990. The Bildt cabinet issued a general bank-obligations guarantee, created the Securum bad bank, and let the krona float on 19 November 1992. GDP fell 5.1 percent over 1991–1993 and total net fiscal cost stayed near 2 percent of GDP, making the Swedish response a globally cited template for systemic banking resolution.
The Swedish banking crisis of 1991–1993 closed the post-war financial regime. After the November 1985 kreditmarknadens avreglering, a credit-fuelled commercial-property bubble burst from autumn 1990 and threatened the largest Swedish banks, with the partly state-owned Nordbanken at the centre.
The Bildt cabinet under Carl Bildt and Finance Minister Anne Wibble responded with three structurally aggressive moves. In autumn 1992 the state issued a general guarantee of all bank obligations (excluding shareholders), wiping out moral hazard for depositors and counterparties without socialising equity losses. On 19 November 1992 the krona was allowed to float after the 500 percent overnight-rate defence collapsed. And in December 1992 the state created Securum as a bad bank to absorb roughly 67 billion SEK of distressed Nordbanken loans.
GDP fell about 5.1 percent cumulatively, private investment plummeted by 35 percent, and total net fiscal cost was near 2 percent of GDP after asset recoveries. The episode hardened the cross-party fiscal conservatism that later produced the NDC pension reform and the Persson surplus rule, and it became the textbook reference for the 2008 Swedish bank-stabilisation framework under Fredrik Reinfeldt.