Archive for the ‘Bad bank’ Category
America’s bail-out bill: Cheap as chips?
From The Economist print edition
America is touting the low price of its financial bail-out. It may be too optimistic
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[Greg Ip] COULD the worst financial crisis in history really also be one of the cheapest? America’s Troubled Asset Relief Programme (TARP), created at the height of the crisis in 2008, will end up costing taxpayers less than 1% of GDP, Treasury officials now believe. By comparison, previous systemic banking crises have on average cost 13% of GDP to resolve, according to estimates by the International Monetary Fund. “This is a pretty good return on investment,” Ben Bernanke, chairman of the Federal Reserve, told Time.
It is not just the Americans who are bullish on bail-outs. Read the rest of this entry »
The economics of “Good bank-bad bank”
Economics focus
The spectre of nationalisation
From The Economist print edition
There are ways for governments to revitalise banks without taking them over
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IT IS generally easier to remove a kidney from a dead donor than a live one. When regulators in Scandinavia and America in the early 1990s started extracting the bad assets from their crisis-hit banking systems, it helped that the banks they dealt with were bust or in the government’s hands. Today, policymakers are trying to excise toxic assets from banks that are still, at least officially, private and viable. That is a much trickier proposition. Read the rest of this entry »
