The feds are looking at nationalizing US banks — as was done in Nordic countries in the 1990s — as a possible fix for the ongoing credit crisis.

According to a report in The Daily Telegraph:

A senior official at one of the Scandinavian central banks told The Daily Telegraph that Fed strategists had stepped up contacts to learn how Norway, Sweden and Finland managed their traumatic crisis from 1991 to 1993, which brought the region’s economy to its knees.

It is understood that Fed vice-chairman Don Kohn remains very concerned by the depth of the US crisis and is eyeing the Nordic approach for contingency options.

You can get the full story here.

The news comes amid a raft of proposals by US Treasury Secretary Hank Paulson to overhaul the system of financial regulation in the US by turning the Federal Reserve into a kind of Wall Street ’supercop’.

Stephanie Grimmet says Paulson’s proposals “could actually save money and provide a simpler system for companies trying to follow the ornate business laws already in place in the U.S.”

“But I’m afraid the public, or at least the public as it is seen by the press and elected government, will require a whipping boy after watching their home values collapse and inflation destroy their savings. Someone must be slapped about by a Congressional committee or, preferably, jailed in a comfortable resort-like low-security prison for several months to satisfy the blood-lust incited by the real estate collapse.”