ABSTRACT
The main objective of crisis management policies is to re-establish the financial intermediation processes upon which the economy depends for an efficient allocation of capital, and to accomplish the objective at minimal costs. The chapter presents a brief description of the Nordic crises and analyse the various solutions adopted to solve the crisis in the three countries, and the debate about their respective effectiveness. The Nordic countries' successful experience in crisis management shows that several economic, regulatory and political prerequisites can help in different ways to minimize the distortions. Generally speaking, as a consequence of the crises, banking systems in the Nordic countries gradually became more concentrated and integrated, making the problem of dealing with cross-border banks' crises the principal, and yet unresolved, regulatory challenge for the Nordic countries. The ministries of finance, central banks, and financial supervisory authorities of the Nordic and Baltic countries have signed a Memorandum of Understanding on financial stability, crisis management and crisis resolution.
