Sweden Teaches Banks Responsibility

This article I read in the New York times, once again discusses how much U.S. relies on the wisdom and strength of other countries. The Swedish government decided that it was no longer smart to have the government keep bailing out the banks, instead, the banks should have to bail themselves out. They set up a system where every month a certain amount of the banks liabilities, right now it is .018%, will be paid to the government and stored.

As time goes on, this amount will continue to rise, to about .036%, so that the amount of money will eventually be large enough to cover the cost of the next major financial disaster within the banks. Sweden says that within fifteen years the total will be equal to the amount most major financial break downs cost. The United States saw the potential of this idea, and how well it has so far been working for Sweden and decided to give it a try for our system. Barack Obama has decided that the U.S. banks are going to begin paying a certain percent of their liabilities every month to the government as well for at least ten years. We will see how well this works, and then judge from there whether or not to continue the process. Sweden was able to avoid going under at the level that most countries did during this recession, so the U.S. had faith in their new plan. 

As in  many articles that have been printed lately, I think that the writers do a wonderful job of stressing the importance of global success rather than individualized success. Everyone enjoys living in a country with lots of power and wealth, but we must also hope for the wealth of the whole world because otherwise we cannot avoid recessions like the one in the 1930's or 2009. We have to work on learning from the financial mistakes we have made, and fixing them before history repeats itself.