Glick Report
  • February 23, 2009 09:28 PM EST by Alexis Glick

    Learning From Sweden and Canada: How to Solve the U.S. Financial Crisis

    In the wake of the news this weekend that the U.S. government may take a larger stake in Citigroup (C), I talked to officials from two different countries whose financial institutions have either undergone nationalization and risen above it or have escaped nationalization because the regulatory system prevented excessive leverage.

    Let me start with Leif Pagrotsky, a member of parliament and vice chairman of the Swedish central bank – Riksbank. Pagrotsky was also the former Swedish Secretary of State for Financial Affairs and former Swedish Minister for Industry and Trade. In the early 90s, Sweden had a banking system on the verge of collapse after a housing bubble burst. The government stepped in, spent roughly 4% of GDP to rescue ailing banks and created a good bank/bad bank structure. They created this structure first and specifically for Nordbanken (The Northern Bank), in which the government took an 80% stake. The government chose to buy the remaining portion and created a bad bank called Secorum where the toxic assets were housed. They didn't have to worry about how to price those assets and had great success hiring talent to turn the state-owned toxic entity around. In the end, the final cost to the government was less than 2% of GDP. Some say it was closer to 0%. Some suggest the Swedish model is the one the U.S. should pursue.

    Take a look at the lessons Leif says can be learned from Sweden’s financial crisis – a crisis that caused unemployment to quadruple from 3% in 1990 to 12% in 1993.

    Immediately after I talked to the vice chairman of the Swedish central bank, I interviewed -- in a “First on Fox Business” -- Canadian Prime Minister Stephen Harper about a lot of things: Everything from his meeting with President Obama last week, to NAFTA to the "Buy American" clause in the stimulus to carbon emissions and the Canadian Sands to the banking system. Why has Canada's banking system withstood the financial crisis while other countries banking systems like the U.S. are in such dire straits? In 2008, the World Economic Forum ranked Canada's banking system the healthiest in the world. The U.S. was ranked 40th. Canada’s system has much stronger federal regulations and lower mandatory leverage ratios. Canada’s firms never engaged in subprime mortgage lending. For over a decade, Canada has posted budget surpluses; only in the last quarter did they enter into a recession. What is working? What lessons could we learn from them? Take a look. Prime Minister Harper is very impressive.

Rich

Fist off: I do thank FOX NEWS BUSINESS for interviewing STEPHEN HARPER, the prime minister of Canada. You have no idea how we feel seeing our prime minister being treated with respect which he rightly deserves. Unfortunately the Canadian National TV and newspapers which are mainly liberals-only a few radio talk shows host are conservatives, have gone so far as to disrespect ridicule mock insult the sitting prime minister at the same time while PM is in OFFICE, the liberal main stream media (MSM) are using the airwaves to promote and campaign for the OPPOSITION LIBERAL PARTY. Why is that? Well, is because the MSM do not want a CONSERVATIVE in government-no matter how good in his job the prime minister is. That's the canadian Liberal MSM mentality. Their job is to support the liberal party of canada and not the canadian people. THEY (MSM) HATE THE PRIME MINISTER SO MUCH THAT THEY WILL DO ANYTHING TO RUIN TO BRING HIM DOWN.

March 1, 2009 at 9:25 pm

Wintery Knight

Don't forget his about his interview with LARRY KUDLOW on CNBC and his interview in the Wall Street Journal with MARY ANASTASIA O'GRADY. I blogged about if you need the links or google for them.

March 1, 2009 at 7:52 pm

Jonny Ann

The beauty of Canada is that it has for several years a minority goverment. A dead Duck unable to do anything extremely good or bad without instantaneously receiving a vote of non condidence and elections must occur unless a coalition government is form and accepted. As Ron Paul would say: The best best government is no Government. Ron Paul is alledged to have brought over 4,000 babies into this world and he of all people should know better. Not all deliveries were equal and some needed more assistance than others. I simply can't famthom his thinking although he is right in so many ways. Someone might say what about the good! Well the last time we did anything that good was solving the polio vacine which after almost 50 years later no other cures were ever found in the entire world. Prolongation of life or pain relief of sort are available at oligarchy prices highly profitable to few. Harper an alledge distance cousin of Bush of sort has done nothing but indebted us further through war as it is the most efficient profitable means to extract tax money from the people. The people before him were frugal enough to save and reduce the Canadian National debt. The private banks in Canada are not so golden altruistic as they may appear. The Bank of Canada (1934) is owned by the people. Although at this moment and since 1992 it is without power since its inception but it is still on the books and reminds the banks that if you are going to be that stupid in printing money out of thin air we the people can print that money out of thin air. As with the continental scripts prior to the USA revolution was so successful in printing only what was required and avoid hyper inflation, they, the rich,the bankers will do everything in their power to make the Bank of Canada owned by the people to dissappear and self destruct. Thanks to their avarice and stupidity this may not happen.

February 24, 2009 at 10:05 pm

Claude Archambault

OK, now that our friends south of the border have kicked out the moron who served as president and did not reelect a member of his idiotic party for way to long and replaced him with an intelligent man, We as canadian need to do the same. Its true, Harper is a minority governement for the second time, and he needs to be replace ASAP. And this time we do have choice as oppose to the 2 last elections. Because Harper and Bush are one , except that Harper is marginally more intelligent. And the conservative are just an extenssion of the republican north of the border. Let get someone intelligent like Ignatieff and the Liberals in power with a strong majority. Then both contry can solve their problem together and show the world the beacon of hope we together are. Yes we can, Yes we will.

February 24, 2009 at 9:54 pm

Chazz

Prime Minister Stephen Harper is the best thing to happen to Canada in several decades. First and foremost, he is an economist, exactly what any country needs right now. His family comes from eastern Canada, born and raised in Toronto, educated and now resides in Western Canada (when not in Ottawa). I get the feeling Obama will be calling Mr. Harper quite often, for economic advice. Having said all this, Canadian voters will more than likely oust Harper at the next oportunity, opting for a Brit / American / Canadian of convenience with zero economic skills and lots of arrogance. Go figure.

February 24, 2009 at 8:38 pm

Richard Wolfe

I was in Mexico for the last 5 weeks and saw the P.M.'s visit to New York as reported on CCN[Asia], Fox and Bloomberg. All was extremely POSITIVE regarding our Prime Minister Steven Harper. Upon returning home I find the Left MSM is more interetsted in promoting Iggy and Rae. CFTO has almost totally ignored the visit. I call it simply "bias by omission" which the Toronto "Pravda" Star is a master at.

February 24, 2009 at 7:37 pm

Steve

Thanks for your positive comments about (my) Canada's very able Prime Minister, This same competent thoughtful, steady leader is slammed and ridiculed daily by the Canadian Liberal Mainstream media, CBC and CTV. Canada has never had such a impressive Prime Minister who knows what he is doing and who can actually articulate it. When have been accustomed to being governened by unqualified corrupt Liberal Governments enabled by the Canadian MSM. Steve

February 24, 2009 at 7:14 pm

Soccermom

Thanks, Alexis! We think our PM is quite impressive as well! And compared to the alternative, which as of December was a coalition made up of corrupt Liberals, far-left socialists, and Quebec separatists, I hope voters here continue to support him and give him an even bigger mandate in the next election. He's one of the best.

February 24, 2009 at 5:49 pm

Billy C

I've not heard much about this guy Mr Harper but he seems very impressive. Canada always seems to choose people as their leader who come from very professional backgrounds. I looked him up and apparently his has a master degree in Economics... and it is funny to hear a conservative from Canada talking about how much he supports universal health care as if it had nothing to do with ideology... impressive

February 24, 2009 at 5:25 pm

Mike

Great job Harper!

February 24, 2009 at 4:37 pm

Pam

Canada's healthcare costs per capita are actually less than our counterparts in the US. This was a great interview Alexis. Thanks for drawing attention to our PM.

February 24, 2009 at 3:42 pm

Pam

Prime Minister Harper is impressive because, unlike some widely touted celebrity politicians, he actually is experienced, and is an economist to boot.

February 24, 2009 at 3:30 pm

about this blog

  • Alexis Glick is an anchor for FOX Business Network. Prior to joining FOX, Glick served as a correspondent for the Today Show and co-anchored the third hour of that program. Before her stint at NBC News, she was the senior trading correspondent for CNBC and reported from the floor of the New York Stock Exchange.

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