Sweden’s bad banks, Securum and Retriva, managed to limit losses on non-performing assets. A successful resolution also appears to be on the horizon for Berliner Immobilien Holding. 25 With the application of the principle that the stockholders should bear losses first, it was possible to secure relatively low prices for the acquired assets. This circumvented potential “lemon market” effects. At the same time, there were no incentives established for shareholders to rely on the expectation of government assistance in the future. The partners involved in negotiations for the restructuring of the troubled assets were clearly identifiable and accessible,.
