The Rafael del Pino Foundation hosted the Keynote Lecture by Stefan Ingves entitled "The Swedish economy's response to the challenges of the future. The importance of being awake; lessons in the management of the European crisis", as part of the "Lessons from the crisis" series of lectures, on 15 April 2010.
Stefan Ingves stated, when talking about bailouts of financial institutions, that "when it is impossible to prevent the crisis, there are two options. The first is very simple: let the bank fail and use the usual bankruptcy procedures. But although the solution is very simple, the consequences are not to be taken lightly: if you let a bank fail, you risk destabilising the financial system. The second option, bailing out all or part of the bank, is more complicated. You have to weigh the costs of destabilising the financial system against the costs of rescuing a bank. But I want to make it clear that banks are not rescued because they deserve it; on the contrary, the managers and shareholders of the institutions are usually responsible for the problems in which the institution may have been involved.
With regard to the internationalisation of banks, Stefan Ingves stressed that: "Banking business is becoming increasingly global and this means that cooperation between central banks has to be extended. This is particularly important for those countries whose financial sector has a high degree of cross-border activities. Spain and Sweden share this characteristic, even though the nature of the cross-border activities of the banks in our countries are of a very different nature.
