Criticism
Critics of bad banks argue that the prospect that the state will take over non-performing loans encourages banks to take undue risks, which they otherwise would not. Another criticism is that the option of handing the loan over to the bad bank becomes essentially a subsidy on corporate bankruptcy. Instead of developing a company that is temporarily unable to pay, the bondholder is given an incentive to sue for bankruptcy immediately, which makes it eligible for sale to a bad bank. Thus, it can become a subsidy for banks on the expense of small businesses.
Read more about this topic: Bad Bank
Famous quotes containing the word criticism:
“The aim of all commentary on art now should be to make works of art—and, by analogy, our own experience—more, rather than less, real to us. The function of criticism should be to show how it is what it is, even that it is what it is, rather than to show what it means.”
—Susan Sontag (b. 1933)
“Homoeopathy is insignificant as an art of healing, but of great value as criticism on the hygeia or medical practice of the time.”
—Ralph Waldo Emerson (1803–1882)
“It is ... pathetic to observe the complete lack of imagination on the part of certain employers and men and women of the upper-income levels, equally devoid of experience, equally glib with their criticism ... directed against workers, labor leaders, and other villains and personal devils who are the objects of their dart-throwing. Who doesn’t know the wealthy woman who fulminates against the “idle” workers who just won’t get out and hunt jobs?”
—Mary Barnett Gilson (1877–?)