Bad bank is a term for a financial institution created to hold non-performing assets owned by a state guaranteed bank. Such institutions have been created to address challenges arising during an economic credit crunch wherein private banks are allowed to take problem assets off their books. Securum, a Swedish bank founded to take on bad assets during the Swedish banking rescue of 1991 and 1992, is an example of such a bank.
The financial crisis of 2007–2010 resulted in bad banks being set up to handle the crisis in a variety of countries. For example, a bad bank was suggested as part of the Emergency Economic Stabilization Act of 2008 to help address the subprime mortgage crisis in the US. In Ireland, a bad bank, the National Asset Management Agency was established in 2009, in response to the financial crisis in that country.
Read more about Bad Bank: Experiences From Swedish Bad Banking, Bad Bank in UK, Bad Bank in Germany, Bad Bank in Spain, Bad Banking in Finland, Criticism, See Also
Famous quotes containing the words bad and/or bank:
“[A] sullen-wise Man is as bad as a good-natured Fool. Knowledge, softened with Complacency and good Breeding, will make a Man equally beloved and respected; but when joined with a severe, distant and unsociable Temper, it creates rather Fear than Love.”
—Richard Steele (1672–1729)
“It was like passing a boundary to dive
Into the sun-filled water, brightly leafed
And limbed and lighted out from bank to bank.
That’s how the stars shine during the day.”
—Wallace Stevens (1879–1955)