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Is Sweden facing a second financial crisis?: a comparative study of the period before the 90’s financial crisis, the IT-crisis and today
Södertörn University College, School of Social Sciences.
Södertörn University College, School of Social Sciences.
2007 (English)Independent thesis Advanced level (degree of Magister), 10 points / 15 hpStudent thesis
Abstract [en]

The aim for this thesis is to evaluate whether there is a risk for Sweden to be the subject of a financial crisis. This question is addressed by making a comparative analysis of three different periods in time. These are the prelude to the crisis in the early 90’s, the period before the substantial decrease in the market value of IT-related stock followed by a short recession 2001-2003 and lastly the still on-going economic boom which started about three years ago. The variables and indicators we are focusing on are mainly the same which have been used in earlier studies in this field. We examine the interest risk rate of banks by looking at the variations in market value between assets and liabilities using duration mismatch analysis. We also study the average debt-level among firms, the debt-level of households, currency fluctuations, trade-deficit levels. We analyze our empirical results utilizing crisis theories as well as looking at Sweden’s experiences of financial troubles.

Our most important results shows that Sweden is unlikely to become a subject of a financial crisis. The main reasons for that statement is that the banks are becoming more prudent in their lending policies. The debt-ratio among the public is today lower than the period before the crisis in the 90’s. Second, the risk management among Swedish banks seem to have improved compared to past events. We can see this through witnessing a reduction in credit-loss and a better coverage of risky loans in their portfolios with own capital in accordance with the Basel guidelines in the later period compared to the previous periods. Third: using duration-gap analysis we conclude that the banks nowadays are better at matching their short-term debts with long-term loans. Fourth, Sweden’s trade surplus is a huge contrast compared to the trade deficit the years before the financial crisis of the 90’s which implies that the productivity in the Swedish firms has improved and their debt-levels have been reduced.

Place, publisher, year, edition, pages
Huddinge: Institutionen för samhällsvetenskaper , 2007. , 45 p.
Keyword [sv]
finansiella kriser, finanskriser
National Category
Economics
Identifiers
URN: urn:nbn:se:sh:diva-1434OAI: oai:DiVA.org:sh-1434DiVA: diva2:15514
Uppsok
samhälle/juridik
Supervisors
Examiners
Available from: 2008-01-16 Created: 2008-01-16

Open Access in DiVA

fulltext(894 kB)699 downloads
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f8ed84f4f713c5cf95214ed65720f478b9b5036514bdb37b32124d7480a1b935a550dab6
Type fulltextMimetype application/pdf

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf