Stopping the Crisis, the Swedish Way.
Excellent food at AK Bar & Restaurant where Swedish born chef Conny Andersson reigned became a perfect setting for the Los Angeles Swedish American camber of Commerce’s recent speaker luncheon with Bo Lundgren.
Lundgren, the head of Sweden’s National Debt Office (= Riksgälden) and former leader of Sweden's Moderate Party, which is now in government under Prime minister Fredrik Reinfeld, spoke on the similarities and differences between Sweden’s banking crisis of 1992 and the current economic downturn in the U.S. The group of attentive members and friends of the chamber left the luncheon on June 16 with a much better understanding of the current economic woes in the world.
Sweden was in serious trouble in 1992 when after years of too little regulation, short-sighted economic policy and the end of a property boom the banks became insolvent. Rather than simply bailing out its financial institutions, however, the government held banks responsible and while writing down losses warrants were also issued to the government, in effect making tax payers owners. When later assets were sold, profits flowed to tax payers and later yet, the government was able to recoup even more by selling its shares in the banks and financial institutions. “If government is forced to go into a bank,” said Bo Lundgren, who was Sweden’s minister for fiscal and financial affairs at the time, “It is better to get equity so that there is some upside for the taxpayer.”
Sweden at the time spent 4 percent of its GDP to rescue ailing banks, slightly less than the $700 billion originally dedicated to U.S. financial institutions by the Bush administration (representing roughly 5% of U.S. GDP). But the final cost to Sweden ended up at less than 2 percent of GDP and by some accounts even closer to zero, depending on the rate of return calculation on certain assets.
In related news we hear that Conny Andersson has left his partnership at the AK Restaurant on Abbotkinney Blvd in Venice (www.akinvenice.com). The brand, AK Andersson’s Kitchen is Anderson’s so expect a new venue in the not too distant future. The chef and restaurateur will spend more time at the Spicemill Restaurant at Cockleshell Beach this summer (www.spicemillrestaurant.com). We wish Conny all the best, and ourselves his speedy come back to the LA restaurant scene.