Sweden placed the troubled assets of its banks into a “bad bank,” where they could be held and sold over time as conditions improved. By contrast, the United States has bailed out banks without receiving large equity stakes in return.
Unemployment. Meanwhile, Sweden is still grappling with the effects of the current credit crisis. It has been announced that Sweden’s unemployment rate rose from a less than expected 6.2% in November to 6.4% in December, according to Forbes. It is calculated that unemployment was elevated by 5,000 in December.
The main consensus is that the upward trend for unemployment is likely to continue into 2009.
Tax Breaks. After the announcement of the unemployment rate, Sweden offered companies a two-month tax respite to ease small company’s financial strains, reports Joel Sherwood for The Wall Street Journal. This move was made in light of the eminent risk of bankruptcies in the coming months and to deal with liquidity issues.
- iShares MSCI Sweden Index (EWD): down 8% for the last month