Abstract
This article treats the role of the state in the banking sector, especially government objectives and measures. The purpose is to unveil how and why the role of the state in banking crises differed between the two Scandinavian countries, Denmark and Sweden, and thus critically analyse which objectives justified public enterprises in the banking sector. Our theoretical point of departure is strands of literature within political science, financial economics and economic history. Empirically, we start by comparing the transferring of private banks into state-controlled banks during two crises, the banking crises of Sweden 1990-1993 and the crisis of Denmark 2008-2012. We compare the intrinsic principles and perceptions as well as the very policies implemented during the crises, with a focus on government objectives and state intervention. We argue that reasons for observed differences in the implementation of measures in Sweden and Denmark date back to the early phases of capitalism in the 19th century, i.e. is part of an historical institutional pattern. Sweden was marked by many central state-oriented modernization initiatives while the modernization process in Denmark was marked by uncoordinated local initiatives. Our results and proposed policy implications are related to the discussion of launching effective and legitimate state policies in Europe after a severe financial crisis.