Organizational Learning Capacities of Policy-Making Systems for Financial System Recovery: The Case of Sweden with Some Suggestions for Japan

The Swedish experience of the recovery from the financial system crisis with quick structural reform has often drawn attention as one of the best practices from policy-makers in various countries. For instance, the International Monetary Fund in its 1997 report counted Sweden as one of the five ‘substantial progress countries’ (Dziobek and Pazarbaşioğlu, 1997). In the discussion on the financial system crisis in Japan, the Swedish case had appeared rather sporadically until the mid-1990s (Yoshino, 1994; Masumura, 1997), but it attracted much attention in the 1998 Diet session where the recovery measures from financial crisis were discussed most intensively. Japanese policy-makers have shown their interest in the Swedish case more often since then, but most previous observations, however, have merely focused on the technical aspect. Hence, the ordinary pattern is to point out some advantages and disadvantages of such policy measures as the nationalization of problem banks and divestiture of bad assets, and to discuss the applicability of those measures to Japan.