Can the authorities manage crises in the financial system?

Since the summer of 2007, there has periodically been considerable turmoil in the financial markets. The fact that financial markets experience upswings and downswings is scarcely remarkable or unusual, and there are almost always some countries in the world experiencing problems in their financial sector. This time, however, there appears to be much greater nervousness than people have seen in a long time. Central banks have followed developments with great interest, and, for instance, the European Central Bank, the Federal Reserve and the Bank of England have taken a number of well-publicized measures. This article aims to shed some light on what all the commotion is about this time and to discuss the regulations for managing financial institutions in distress and the challenges facing the authorities -- in Sweden and internationally. But before this, it could be useful to say a little about financial crises on the basis of the current turbulence and the bank crisis Sweden experienced at the beginning of the 1990s.