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:
“He was high and mighty. But the kindest creature to his slaves—and the unfortunate results of his bad ways were not sold, had not to jump over ice blocks. They were kept in full view and provided for handsomely in his will. His wife and daughters in the might of their purity and innocence are supposed never to dream of what is as plain before their eyes as the sunlight, and they play their parts of unsuspecting angels to the letter.”
—Anonymous Antebellum Confederate Women. Previously quoted by Mary Boykin Chesnut in Mary Chesnut’s Civil War, edited by C. Vann Woodward (1981)
“A bank is a confidence trick. If you put up the right signs, the wizards of finance themselves will come in and ask you to take their money.”
—Christina Stead (1902–1983)