Tuesday, December 29, 2009

McKinsey On Using Bad Banks To Salvage Troubled Banks

Read McKinsey Consulting firm's thoughts and analysis on resolving banks with troubled assets in "Understanding the bad bank" by Gabriel Brenna, Thomas Poppensieker, and Sebastian Schneider, December 2009, McKinsey Quarterly.
“Bad banks” are back. The concept is simple. The bank divides its assets into two categories. Into the bad pile go the illiquid and risky securities that are the bane of the banking system, along with other troubled assets....What are left are the good assets that represent the ongoing business of the core bank.
Read the complete McKinsey article here.

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