Allowing Lehman Brothers to collapse was “a mistake by historical dimensions”, Sweden’s Finance Minister Anders Borg said one year after the crash.

It’s been a year since the crash of the American investment bank Lehman Brothers, kicking off the worst financial crisis in modern days and forcing governments all over the world to support the ailing global economy with massive amounts of fiscal stimuli and additional liquidity.

Now Sweden’s Finance Minister Anders Borg slams the US for its conduct. To allow Lehman Brothers to fall was “a mistake by historical dimensions” he said in an interview with Swedish Radio on Monday.

“In the textbook on how to deal with a financial crisis it says on the first row that ‘This is something you can not do’. It got enormous consequences. It set of a chain reaction that took months to stop.”, the minister said.

In an interview with The Swedish Wire in June Anders Borg said that he was disappointed with the way the US and the UK governments have tackled the financial crisis and their unwillingness to nationalize banks.

“I don't believe in just buying toxic assets. You should stand ready to take over banks”, he says.

The Swedish finance minister Anders Borg related the current financial crisis to the Swedish credit crunch in the 1990s. Based on that experience Borg thinks that it is of great importance to really sort out what kind of assets and liabilities banks actually have right now. And in order to do so, governments should be ready to reconstruct banks as Sweden did 15 years ago, instead of just providing the banks with more and more capital.

“The important thing is to save the banking system, not the bank owners”, he told The Swedish Wire.

Anders Borg also blamed the US and the UK for being reluctant to reconstruct banks, something that he believes has delayed the economic recovery in those countries, which in turn has had a negative effect on the world economy.

“If they would have taken powerful measures to restore their banking systems the crisis hadn't been so deep as it now has been and the recovery would have been easier. This is what we learned when we compared the Swedish crisis with the Japanese”, he said.

Anders Borg claimed that after the Swedish crisis in the 90s the loan market was functioning again after one or two years, while it took a decade to restore the Japanese banking system and their loan market.

Even though Anders Borg continuously related to the former Swedish crisis and the way that the country tackled the financial problems back then, he has stressed that he will not try to transform Europe according to the Swedish model during the EU-presidency. However, he will work for an international regulation and he has also declared that common institutions will be necessary in the future since Europe and the US need a common framework.

Current negotiations between the G20 members are expected to heat up during the autumn, Anders Borg said on Monday, adding that Sweden aims to bring in a new set of rules at the financial markets in order to prevent similar shocks in the financial system.

On September 15 last year Lehman Brothers filed for Chapter 11 bankruptcy protection following devaluation of its belongings by credit rating agencies and massive exodus of most of its clients.