I think similar ideas are found all over the world, but few countries outside of Northern Europe have the necessary political responsibility and lack of corruption to actually execute successfully on these ideas.
In Ireland we had a sovereign wealth fund for pensions, called the National Pensions Reserve Fund.
The government raided it to pay for budget shortfalls caused by offering a blanket, virtually unconditional guarantee to (private sector) bank debts, even unsecured bank debts, caused by the collapse in the Irish property market in 2008. The insane loans issued were made whole by the taxpayer at enormous cost to the wider economy. Of course, very little of those involved actually went to prison, although some higher ups in Anglo Irish (described as the worst bank in the world, even worse than Icelandic banks) were eventually, after many years, sent to prison [2]. The CEO of Anglo was even acquitted by a jury!
"The NPRF’s asset base had increased to over €22 billion in 2009. However, following the economic and banking collapse, its assets have been diverted as successive governments raided it to fund programmes or help meet the State’s fiscal commitments during the crisis."
This is a long way of saying that even in Northern Europe incompetence and fraud is possible. I wish we had the competence and level of societal trust the Norwegians have.
The Norwegians also had a very sensible approach to their banking crisis compared to the US and Ireland:
>There are five features of the Norwegian resolution I would like to highlight:
>Private solutions were explored before the government intervened.
>Share capital was written down to zero before committing public funds.
>The government acted swiftly to limit contagion, but did not provide a blanket guarantee. Liquidity support was given to illiquid, but solvent institutions.
>The government did not use an asset management company - as the other Nordic countries did later on.
The "Share capital was written down to zero before committing public funds." seems smart. At least if you wipe out the shareholders it's an incentive to behave better the next time.
