It's not all about management

While the continuing crisis in the international financial markets and the attendant credit crunch have not gone unnoticed in Sweden, most Swedish banks have by and large avoided the worst effects of these phenomena. The fact that most Swedish banks have thus far got away relatively unscathed is primarily due to the business model of our banks. Most banks (including the big four) are at heart commercial and/or retail banking operations with relatively small capital markets divisions. The security portfolios of Swedish banks are primarily held for liquidity purposes and are not a major part of the business mix. Superior management, then, has had little to do with the fact that the balance sheets of Swedish banks are in good shape and that they are still very much open for business on otherwise unpopular credit lines such as leveraged loans.

Although true in some respects, the rosy picture of...