Banking Crises and Lender of Last Resort in Theory and Practice in Swedish History, 1850-2010

This paper is a first attempt to make a comparative analysis of Swedish banking crises over time – focusing on how the crises were handled. The empirical material is also compared to economic theories on crises management, i.e. lender of last resort and bank bailouts. The main questions are: How do the crises management relate to economic theories, i.e. to what extent did the crises management follow any economic rationale? To what extent were the crises management seen as necessary by authorities and market agents, and to what extent were the designs of the crises management made by market agents and/or by authorities? Were there any common features of the crises management over time that can explain why crises were handled in a certain fashion? I also make an estimation of the relative costs for the State to manage each crisis