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Nithila Posted 17 years ago
Vocabulary

What does "so-called bad bank" mean?

Another possibility is to create a so-called bad bank. It would take questionable securities held by other banks. The idea would be similar to the Resolution Trust Corporation set up by the government in nineteen eighty-nine. It was formed to sell assets from failed savings and loan banks.

what does "so-called bad bank" mean?

  

Top answer

I take it such a bank would deal only in the toxic assets still on the books of banks which might be able to succeed if they could unload them. I don't think it would do business like a regular bank. It would take over these "questionable" assets, probably with government money, and give the other banks some breathing room.

— Avangi

  • I take it such a bank would deal only in the toxic assets still on the books of banks which might be able to succeed if they could unload them.
  • I don't think it would do business like a regular bank.
  • It would take over these "questionable" assets, probably with government money, and give the other banks some breathing room.
  • Then the bad bank could specialize in attempting to salvage what it could from these (practically) worthless securities and other assets.
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1 Answers
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I take it such a bank would deal only in the toxic assets still on the books of banks which might be able to succeed if they could unload them. I don't think it would do business like a regular bank.

It would take over these "questionable" assets, probably with government money, and give the other banks some breathing room.

Then the bad bank could specialize in attempting to sa
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