Faced with similar crises in their banking system, Swedish and Japanese policymakers took different approaches. The Swedish reaction was far-reaching and rapid, whereas the Japanese government hesitated for many years to bail out the banks, and, in the end, implemented only limited policies. This essay argues that these differences are best explained by differences in the 'blame avoidance' opportunities for executive bureaucracies and politicians provided by different institutional settings. In the Japanese case, the very close relationship between private banks and the Ministry of Finance-in combination with a less widespread public perception of a system crisis-made it easier to conceal the extent of the banking crisis from politicians. Confronted with the threat of losing jurisdiction over financial administration to a new agency, the Ministry of Finance postponed reform in order to conceal the deep financial problems. In Sweden, deregulation had separated the government from the administration of the banks. Consequently, the executive administration had no incentive to cover up the depth of the crisis, and it was relatively easy to convince the public that banks and not the government were responsible for the crisis. Therefore, it was possible for the Swedish Government to put blame on banks and take credit for efforts to tidy up the mess, without losing credibility.