THE GREAT DEPRESSION OF FINLAND 1990-1993 causes and.pptVIP

SOLVING THE BANKING CRISIS Government take-over of the savings bank group: dissolution and packaging of problem loans to a separate liquidation company (”Arsenal”) final cost 6 billion euros (7 % of 1994 GDP) prosecution of failed bank managers: huge claims, long trials, few convictions Healthy parts of savings bank sold to other banks (=hidden subsidy?) Government’s equity loans to banks to recapitalize them SOLVING THE BANKING CRISIS Restructuring: Merger of two largest commercial banks (KOP + SYP = Merita) Merger of biggest bank with a Swedish bank (Merita + Nordbanken = Nordea) One third