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From 1980-1990 Sweden was going thru a massive real estate boom.  By 1992 the bubble had burst, home prices had fallen 50% and the government began nationalizing their banks.  Their problems were very similar to ours though on a much smaller scale.  They did the exact opposite of what Japan did at the same time (they were also experiencing a massive equity and real estate bubble).  Japan essentially let the market resolve the issues.  They let big banks buy small banks while cutting rates and starting and stopping Keynesian policies.  The results were drastically different.  Japan is still suffering from the bubble and their stock market remains 75% below its all-time highs set in 1990.

Sweden, on the other hand, nationalized their banking sector, forced the losers to lose and recapitalized the banking sector without a great deal of moral hazard and public displeasure.  They rebounded quickly. Their stock market bottomed in 1992 and GDP was growing at 6% by 1995.  In addition, Sweden’s taxpayers actually made money on the nationalization.  I expect the banking sector to recover relatively quickly from this point while the overhang in the general economy lingers.