Greg Ip

Articles by The Economist’s U.S. Economics Editor

Archive for the ‘Bad bank’ Category

America’s bail-out bill: Cheap as chips?

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Jan 14th 2010 | WASHINGTON, DC 
From The Economist print edition

America is touting the low price of its financial bail-out. It may be too optimistic

Illustration by Peter Schrank
Illustration by Peter Schrank


[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 »


Written by gregip

January 14, 2010 at 6:00 pm

The economics of “Good bank-bad bank”

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Economics focus

The spectre of nationalisation

Jan 22nd 2009
From The Economist print edition

There are ways for governments to revitalise banks without taking them over

Illustration by Jac Depczyk


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 »

Written by gregip

January 22, 2009 at 5:20 pm