Are Bad Banks a Good Idea?
The idea of a “bad bank” appears to grow more popular by the day in countries where toxic assets have paralyzed lending, and the Swedish bank cleanup in the early 1990’s is often cited as an example of how successful this idea can be. But the lessons derived from Sweden’s experience are sometimes based on misunderstandings of what the Swedes actually did.
https://prosyn.org/M6nuLUQ
STOCKHOLM – The idea of a “bad bank” appears to grow more popular by the day in countries where toxic assets have paralyzed lending. The Swedish bank cleanup in the early 1990’s is often cited as an example of how successful this idea can be. But the lessons that are sometimes derived from Sweden’s experience are based on misunderstandings of what we actually did, and of how our system worked.