WASHINGTON  The acknowledged masters of bank rescues say the Obama administration plan for saving the U.S. banking industry may be doomed. While the U.S. has funneled tens of billions of dollars to embattled banks such as Citigroup, Sweden temporarily took over two banks late last year and then sold them back to private investors at a roughly 50% profit three months later, says Swedish Finance Minister Anders Borg. U.S. officials should confront the financial industry's political power and seize temporary ownership of troubled banks, Borg says. Otherwise, error-prone bankers will be bailed out at taxpayer expense. "We can't let them get away with the fact that they've been reckless," Borg told a group of economists while attending the recent International Monetary Fund and World Bank meetings here. During a crisis in the early 1990s, Sweden successfully rehabilitated its banking system via temporary nationalization. The government divided the industry into healthy banks and troubled institutions. It pumped capital into the healthy ones, while punishing their shareholders, and held onto the troubled assets until their values recovered. Borg says that approach better protected taxpayers than the current U.S. strategy. The Treasury Department's "public private investment program," unveiled last month, seeks to tempt private investors to buy toxic assets by protecting investors against heavy losses and giving them access to public funds. "Trying to create a phony market" will prove less effective than taking ownership stakes, Borg says. The ponytailed Swedish finance chief, who quotes free-market guru Milton Friedman, suggests ideological blinders are hindering the U.S. "This is not about the market economy," he says. "We don't believe in the state running the banking sector." Both the Bush and Obama administrations have rejected Swedish-style nationalization. In February, President Obama said that the complexity and number of U.S. banks, as well as the country's market traditions, made the Swedish plan inappropriate. "Sweden looks like a good model," Obama told ABC News. "Here's the problem: Sweden had, like, five banks. We've got thousands of banks." Douglas Elliott, a former JPMorgan investment banker, says nationalization would be costly, difficult and perhaps unnecessary unless the economy gets much worse. With some additional public money, and the continuation of recent strong profits, U.S. banks will rebuild their depleted capital base over time, says Elliott, now at the Brookings Institution. Borg says trying the asset purchase plan first may only raise the cost of an eventual government takeover. "I'm not certain it will work," he says. "It might be the case you'll do the same as we." Guidelines: You share in the USA TODAY community, so please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Use the "Report Abuse" button to make a difference. You share in the USA TODAY community, so please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Use the "Report Abuse" button to make a difference. Read more