Nearly 500 participants engage in financial crisis simulation in Nordic and Baltic countries

Nearly 500 participants from eight countries in the Nordic region, as well as the Baltic Sea area and the European Union, engaged in a simulated exercise this week aimed at improving responses to potential financial crises. The exercise revolved around three fictional banks operating across borders that faced a financial emergency, addressing issues such as liquidity problems, government intervention in banks, and restructuring processes leading to their recovery. This scenario is reminiscent of the events during the collapse of Iceland’s banking system in the autumn of 2008.

According to the central bank, the exercise was successful. Following the event, governments plan to draw lessons from the simulation to enhance preparedness for financial crises, while also strengthening the framework for crisis management in the Nordic countries and the Baltic Sea region. Participants hailed from Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, and Sweden. Additionally, staff from three European Union institutions took part in the exercise, alongside an observer from the International Monetary Fund.