Can regulations prevent financial crises? Uses of the past in the evolution of regulatory reforms in Sweden
| Date | 05 April 2023 |
| Pages | 469-482 |
| DOI | https://doi.org/10.1108/JFRC-06-2022-0078 |
| Published date | 05 April 2023 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation |
| Author | Asa Malmstrom Rognes,Mats Larsson |
Can regulations prevent financial
crises? Uses of the past in the
evolution of regulatory reforms
in Sweden
Asa Malmstrom Rognes and Mats Larsson
Department of Economic History, Uppsala Universitet, Uppsala, Sweden
Abstract
Purpose –The purpose of this study is to examine whether regulations can prevent financialcrises based on
the case of Sweden in the 20th century. The evolution of banking regulation relies heavily on learning across
borders as well as responding to recent and remembered crises. Sweden went from being an open economy with
a highly protected national banking system with several banking crises under the Classical regime, through the
Statist regime with no crises followed by abrupt liberalisation in the 1980s as the country changed to a more
market-based regime. This study examines the regulatory responses to crises in each of these periods to assess
how, and whether, an often backward-lookingregulatory framework can address forward-looking risks.
Design/methodology/approach –This study is a qualitative study using a historical method. The
authors use archival material, official publications and statistical data as well as secondary literature to
succinctly analyse crises and regulatory responses in different regulatory regimes in the 20th century.The
theoreticalframework builds on three macro- and microeconomic policy regimes,the Classical, the Statist and
the Market regime.
Findings –The authors find that regulationscan play a decisive role in alleviating a bankingcrisis, but the
relationshipbetween regulations and economic developmentis complex,and regulations alone cannot prevent
a crisis.
Originality/value –To the best of the authors’knowledge,this is the first longitudinal study of banking
regulationsin Sweden and how these change in response to crises with the aim of improving the role of banks
in financial intermediationand financial stability. This study contributes to a body of literatureon financial
crises witha long-term perspective and an assessmentof regulations as a policy response.
Keywords Sweden, Banking crises, Banking regulation, Regime change
Paper type Research paper
Introduction
Whenever banks fail or when systemic banking crises take place, the media and lawmakers
tend to turn to regulations as the cure and the means to prevent future crises. The question of
regulations as a response to financial crises has been examined by several scholars from
© Asa Malmstrom Rognes and Mats Larsson. Published by Emerald Publishing Limited. This article
is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce,
distribute, translate and create derivative works of this article (for both commercial and non-
commercial purposes), subject to full attribution to the original publication and authors. The full
terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode
The authors would like to thank the reviewers and Jan Ottosson for comments and suggestions.
The research was supported by the Humanities in the European Reasearch Area Joint Research
Programme,Uses of the Past in International Economic Relations, co-funded by Arts and Humanities
Research Council and The European Community Horizon 2020-EU.3.6 grant agreement no. 649307.
Evolution of
regulatory
reforms in
Sweden
469
Received27 June 2022
Revised31 October 2022
12December 2022
24February 2023
Accepted2 March 2023
Journalof Financial Regulation
andCompliance
Vol.31 No. 4, 2023
pp. 469-482
EmeraldPublishing Limited
1358-1988
DOI 10.1108/JFRC-06-2022-0078
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1358-1988.htm
Get this document and AI-powered insights with a free trial of vLex and Vincent AI
Get Started for FreeStart Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
