The global economic crisis, and governments’ responses to the crisis, did not precipitate a descent into 1930s-style protectionism. That is a relief. But it provides no refuge from policy measures that will slow down globalisation and growth in the next decade. ‘Creeping protectionism’ is increasing, and the crisis has reinforced trends visible before the start of the crisis. New patterns of protectionism are similar to developments in the 1970s and 1980s rather than the 1930s. Domestic ‘crisis interventions’, especially in capital and product markets, and the return of Big Government, will spill over to external policy, with more defensive trade policies as a consequence.

Many banks are on the verge of bankruptcy and have received support from the government to stay afloat. Measures taken have not sufficed, and an increasing number of economists and commentators are calling for the nationalisation of banks in the United Kingdom and United States. In their advocacy, they use Sweden as an exemplar, suggesting that massive bank nationalisation was the way it fixed its collapsing banking sector in the early 1990s. This account of Sweden’s resolution policy is erroneous and exaggerates the role of nationalisation. Sweden successfully combated a banking crisis, and two banks received full government ownership. The main example of nationalisation, however, was a financial reconstruction of a bank already controlled by the government. The only real example of nationalisation of a privately owned bank hardly offers lessons for ways to resolve the current banking crisis.