A bad bank is an entity that purchases distressed assets from a bank at sizeable discounts to book value and then searches for buyers for those assets. A proposal to establish a bad bank was outlined in the Indian Union Budget 2021-22. In this paper, an attempt has been made to explore the...

The paper investigates whether impaired asset segregation tools, otherwise known as bad banks, and recapitalisation lead to a recovery in the originating banks' lending and a reduction in non-performing loans (NPLs). Results are based on a novel data set covering 135 banks from 15 European...

Kreditinstitute in Deutschland: Markt- und Strukturdaten -- Die Besonderheiten der deutschen Kreditwirtschaft -- Deutsche Kreditwirtschaft im internationalen Vergleich -- Chancen, Risiken und prognostizierte Branchenentwicklung -- Notlagen von Kreditinstituten und Marktaustrittsmöglichkeiten im...

The outbreak of COVID-19 has made it essential to think of various mechanisms in every aspect so that the situation that has worsened can be bought back into the track. One such initiative is the establishment of the bad banks for settling the non-performing assets of the banks. There has been a...

Italy’s banks are struggling under high amounts of non-performing loans on their balance sheets and the Italian government is fighting with the European Commission over putting 50 billion Euro of problem loans into a bad bank, which needs funding of 10 billion Euro with public money....

Addressing the buildup of nonperforming loans (NPLs) in Italy since the global financial crisis will remain a challenge for some time and be important for supporting a sustained, robust economic recovery. The buildup reflects both the prolonged recession as well as structural factors that have...

In this paper, we analyze how sources of political influence relate to the actual regulatory treatment of distressed banks and to the expectation of bank support provided by the government. We assemble a unique dataset that links U.S. banks' sources of influence (e.g., lobbying expenditures,...

In this paper, we analyze how sources of political influence relate to the actual regulatory treatment of distressed banks and to the expectation of bank support provided by the government. We assemble a unique dataset that links U.S. banks' sources of influence (e.g., lobbying expenditures,...

Addressing the buildup of nonperforming loans (NPLs) in Italy since the global financial crisis will remain a challenge for some time and be important for supporting a sustained, robust economic recovery. The buildup reflects both the prolonged recession as well as structural factors that have...

At least 12 European Union member states used publicly created asset management companies (AMCs), otherwise known as a "badbanks" to respond to the recent financial crisis. This tool remains an option for future bank resolutions under the EU Bank Recovery and Resolution Directive. We assess the...

Indian banking is passing through a difficult phase of twin balance sheet problem and depleting capital base. As defined by the IMF in its Global Financial Stability Report, October 2017, Indian banking is placed on a par with the leveraged banking system of PIIGS (Portugal, Italy, Ireland,...

This paper develops a model to analyze two different bad bank schemes, an outright sale of toxic assets to a state-owned bad bank and a repurchase agreement between the bad bank and the initial bank. For both schemes, we derive a critical transfer payment that induces a bank manager to...

This paper develops a model to analyze two different bad bank schemes, an outright sale of toxic assets to a state-owned bad bank and a repurchase agreement between the bad bank and the initial bank. For both schemes, we derive a critical transfer payment that induces a bank manager to...

1 Work-out: holistic active management of NPL -- 2 The bad bank and the good banking -- 3 The work-out value chain: permutations and clusters -- 4 The work-out unit: captive – deceptive -- 5 Developing a credit work out “alpha platform” -- 6 Developing an holistic and active credit work...

This article reflects on some of the banking crisis resolution measures taken by the Swedish and Norwegian governments during the Scandinavian banking crisis of the early 1990s. Much as in the U.S. in 2008, the Scandinavian crisis two decades ago was preceded by a broad relaxation of bank...

With banking sectors worldwide still suffering from the effects of the financial crisis, public discussion of plans to place toxic assets in one or more bad banks has gained steam in recent weeks. The following paper presents a plan how governments can efficiently relieve ailing banks from toxic...