Prologue
In the late 80s bank savings by Swedish households falls below zero, people start to borrow more money than they save. The overheated economy leads to high salary increases and an inflation spiraling out of control. In Stockholm people are very proud, new statistics show that Stockholm is the city in the whole world with most Porsches per inhabitant. That almost all these Porsches have been purchased with borrowed money is a fact that it is not considered appropriate to mention.
In 1990 the credit bubble finally burst. Banks credit losses explode as debtors find it increasingly difficult to pay their interest and installments. As an increasing number of debtors default on their real estate loans the amount of foreclosures also increase. Banks sell more and more houses on compulsory auctions for a lower price than the principal loan amount, meaning debtors still have an unpaid loan left after their house is sold. Gota bank, founded in 1848 and one of the five biggest banks in Sweden, is bankrupt and taken over by the state. SEB, founded by the Wallenberg family in 1856, is also very close to bankruptcy but manages to recover on the brink of the abyss.
November 1992, finally reality wins over prestige. The fixed exchange rate is abandoned and the Swedish krone, SEK, looses 30% of its value in one of the most dramatic devaluations in Europe in modern times.
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