Bad Bank Definition
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9/13/2015 Bad Bank Definition | Investopedia http://www.investopedia.com/terms/badbank.asp 1/4 Top 10 Mutual Funds Buy Mutual funds online.Select from 5000+ schemes. Open Free A/c now. Investment Bank - IB Investment Bank - IB A financial intermediary that performs a A financial intermediary that performs a variety of services. ... variety of services. ... Bank Credit Bank Credit The amount of credit available to a company The amount of credit available to a company or individual from ... or individual from ... Chapter 11 Chapter 11 Named after the U.S. bankruptcy code 11, Named after the U.S. bankruptcy code 11, Chapter 11 is a form ... Chapter 11 is a form ... Nonperforming Asset Nonperforming Asset A debt obligation where the borrower has A debt obligation where the borrower has not paid any previously ... not paid any previously ... Bank Bank A financial institution licensed as a receiver A financial institution licensed as a receiver of deposits. There ... of deposits. There ... Technical Bankruptcy Technical Bankruptcy The state of a company or person who has The state of a company or person who has defaulted on a financial ... defaulted on a financial ... DEFINITION OF 'BAD BANK' DEFINITION OF 'BAD BANK' A bank set up to buy the bad loans of a bank with significant nonperforming assets at market A bank set up to buy the bad loans of a bank with significant nonperforming assets at market price. By transferring the bad assets of an institution to the bad bank, the banks clear their price. By transferring the bad assets of an institution to the bad bank, the banks clear their balance sheet of toxic assets but would be forced to take write downs. Shareholders and balance sheet of toxic assets but would be forced to take write downs. Shareholders and bondholders stand to lose money from this solution (but not depositors). Banks that become bondholders stand to lose money from this solution (but not depositors). Banks that become insolvent as a result of the process can be recapitalized, nationalized or liquidated. insolvent as a result of the process can be recapitalized, nationalized or liquidated. BREAKING DOWN 'BAD BANK' BREAKING DOWN 'BAD BANK' A well-known example of a bad bank was Grant Street National Bank, which was created in A well-known example of a bad bank was Grant Street National Bank, which was created in 1988 to house the bad assets of Mellon Bank. The financial crisis of 2008 revived interest in 1988 to house the bad assets of Mellon Bank. The financial crisis of 2008 revived interest in the bad bank solution, as managers at some of the world's largest institutions contemplated the bad bank solution, as managers at some of the world's largest institutions contemplated segregating their nonperforming assets into bad banks. segregating their nonperforming assets into bad banks. Federal Reserve Bank Chairman Ben Bernanke proposed the idea of using a government-run Federal Reserve Bank Chairman Ben Bernanke proposed the idea of using a government-run bad bank in the recession following the subprime mortgage meltdown in order to clean up bad bank in the recession following the subprime mortgage meltdown in order to clean up private banks with high levels of problematic assets and allow them to start lending again. An private banks with high levels of problematic assets and allow them to start lending again. An alternate strategy considered was a guaranteed insurance plan that would keep the toxic alternate strategy considered was a guaranteed insurance plan that would keep the toxic assets on the banks' books but eliminate the banks' risk and pass the risk on to taxpayers. assets on the banks' books but eliminate the banks' risk and pass the risk on to taxpayers. Refine Your Financial Vocabulary Refine Your Financial Vocabulary Gain the Gain the Financial Knowledge You Need to Succeed. Financial Knowledge You Need to Succeed. Investopedia’s FREE Term of the Day Investopedia’s FREE Term of the Day helps you gain a better understanding of all things financial with technical and easy-to- helps you gain a better understanding of all things financial with technical and easy-to- understand explanations. understand explanations. Click here Click here to begin developing your financial language with this to begin developing your financial language with this daily newsletter. daily newsletter. BONDS & FIXED INCOME BONDS & FIXED INCOME 5 Signs Of A Credit Crisis 5 Signs Of A Credit Crisis These indicators can illuminate the depth and severity of problems in the credit markets. These indicators can illuminate the depth and severity of problems in the credit markets. Subscribe to our Free Newslett Subscribe to our Free Newslett Enter e-mail address Enter e-mail address S S Lear Lear How to Turn $50 into $1,000, Every Day, as Lo How to Turn $50 into $1,000, Every Day, as Lo Stock Market is Open Stock Market is Open Exclusive: Learn the "House Odds" of Investin Exclusive: Learn the "House Odds" of Investin Are you interested in generating income? Are you interested in generating income? Endowment Effect Endowment Effect Bad Bank Bad Bank You may also like: You may also like: Does Warren Buffett own the same stock as you? Does Warren Buffett own the same stock as you? 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Bad Bank Definition
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9/13/2015 Bad Bank Definition | Investopedia
http://www.investopedia.com/terms/badbank.asp 1/4
Top 10 Mutual FundsBuy Mutual funds online.Select from 5000+ schemes. Open Free A/c now.
Investment Bank - IBInvestment Bank - IBA financial intermediary that performs aA financial intermediary that performs avariety of services. ...variety of services. ...
Bank CreditBank CreditThe amount of credit available to a companyThe amount of credit available to a companyor individual from ...or individual from ...
Chapter 11Chapter 11Named after the U.S. bankruptcy code 11,Named after the U.S. bankruptcy code 11,Chapter 11 is a form ...Chapter 11 is a form ...
Nonperforming AssetNonperforming AssetA debt obligation where the borrower hasA debt obligation where the borrower hasnot paid any previously ...not paid any previously ...
BankBankA financial institution licensed as a receiverA financial institution licensed as a receiverof deposits. There ...of deposits. There ...
Technical BankruptcyTechnical BankruptcyThe state of a company or person who hasThe state of a company or person who hasdefaulted on a financial ...defaulted on a financial ...
DEFINITION OF 'BAD BANK'DEFINITION OF 'BAD BANK'A bank set up to buy the bad loans of a bank with significant nonperforming assets at marketA bank set up to buy the bad loans of a bank with significant nonperforming assets at market
price. By transferring the bad assets of an institution to the bad bank, the banks clear theirprice. By transferring the bad assets of an institution to the bad bank, the banks clear their
balance sheet of toxic assets but would be forced to take write downs. Shareholders andbalance sheet of toxic assets but would be forced to take write downs. Shareholders and
bondholders stand to lose money from this solution (but not depositors). Banks that becomebondholders stand to lose money from this solution (but not depositors). Banks that become
insolvent as a result of the process can be recapitalized, nationalized or liquidated.insolvent as a result of the process can be recapitalized, nationalized or liquidated.
BREAKING DOWN 'BAD BANK'BREAKING DOWN 'BAD BANK'A well-known example of a bad bank was Grant Street National Bank, which was created inA well-known example of a bad bank was Grant Street National Bank, which was created in
1988 to house the bad assets of Mellon Bank. The financial crisis of 2008 revived interest in1988 to house the bad assets of Mellon Bank. The financial crisis of 2008 revived interest in
the bad bank solution, as managers at some of the world's largest institutions contemplatedthe bad bank solution, as managers at some of the world's largest institutions contemplated
segregating their nonperforming assets into bad banks. segregating their nonperforming assets into bad banks.
Federal Reserve Bank Chairman Ben Bernanke proposed the idea of using a government-runFederal Reserve Bank Chairman Ben Bernanke proposed the idea of using a government-run
bad bank in the recession following the subprime mortgage meltdown in order to clean upbad bank in the recession following the subprime mortgage meltdown in order to clean up
private banks with high levels of problematic assets and allow them to start lending again. Anprivate banks with high levels of problematic assets and allow them to start lending again. An
alternate strategy considered was a guaranteed insurance plan that would keep the toxicalternate strategy considered was a guaranteed insurance plan that would keep the toxic
assets on the banks' books but eliminate the banks' risk and pass the risk on to taxpayers.assets on the banks' books but eliminate the banks' risk and pass the risk on to taxpayers.
Refine Your Financial VocabularyRefine Your Financial Vocabulary
Gain the Gain the Financial Knowledge You Need to Succeed.Financial Knowledge You Need to Succeed. Investopedia’s FREE Term of the Day Investopedia’s FREE Term of the Day
helps you gain a better understanding of all things financial with technical and easy-to-helps you gain a better understanding of all things financial with technical and easy-to-
understand explanations. understand explanations. Click hereClick here to begin developing your financial language with this to begin developing your financial language with this
daily newsletter.daily newsletter.
BONDS & FIXED INCOMEBONDS & FIXED INCOME
5 Signs Of A Credit Crisis5 Signs Of A Credit CrisisThese indicators can illuminate the depth and severity of problems in the credit markets.These indicators can illuminate the depth and severity of problems in the credit markets.
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Enter e-mail addressEnter e-mail address Sign UpSign Up
Learn More »Learn More »
How to Turn $50 into $1,000, Every Day, as Long as theHow to Turn $50 into $1,000, Every Day, as Long as theStock Market is OpenStock Market is Open
Exclusive: Learn the "House Odds" of InvestingExclusive: Learn the "House Odds" of Investing
Are you interested in generating income?Are you interested in generating income?
Endowment EffectEndowment Effect
Bad BankBad BankYou may also like: You may also like: Does Warren Buffett own the same stock as you?Does Warren Buffett own the same stock as you?
AAAA
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HOT DEFINITIONSHOT DEFINITIONS
Active TradingActive Trading ForexForex Technical AnalysisTechnical Analysis BrokersBrokers OptionsOptions FuturesFutures Personal FinancePersonal Finance RetirementRetirement AcronymsAcronyms AccountingAccounting BankingBanking BondsBonds
DICTIONARYDICTIONARY INVESTINGINVESTING TRADINGTRADING MARKETSMARKETSPERSONALPERSONAL
FINANCEFINANCEWEALTHWEALTH
MANAGEMENTMANAGEMENTFINANCIALFINANCIALADVISORSADVISORS EXAM PREPEXAM PREP TUTORIALSTUTORIALS VIDEOVIDEO
Free Annual ReportsFree Annual Reports || RegisterRegisterSearch InvestopediaSearch Investopedia
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OPTIONS & FUTURESOPTIONS & FUTURES
Dialing In On The Credit CrisisDialing In On The Credit CrisisWould a similar crisis have occurred if iPhone investors were offered theWould a similar crisis have occurred if iPhone investors were offered thesame loan options as homeowners?same loan options as homeowners?
OPTIONS & FUTURESOPTIONS & FUTURES
Mark-To-Market MayhemMark-To-Market MayhemDid this accounting convention contribute to the credit crisis of 2008? FindDid this accounting convention contribute to the credit crisis of 2008? Findout here.out here.
INSURANCEINSURANCE
Fannie Mae, Freddie Mac And The Credit Crisis Of 2008Fannie Mae, Freddie Mac And The Credit Crisis Of 2008Is the U.S. Congress' failure to rein in these mortgage giants to blame for theIs the U.S. Congress' failure to rein in these mortgage giants to blame for thefinancial fallout?financial fallout?
INVESTING BASICSINVESTING BASICS
Understanding the Inverted Yield CurveUnderstanding the Inverted Yield CurveAn inverted yield curve occurs during the rare times when short-termAn inverted yield curve occurs during the rare times when short-terminterest rates are higher than long-term interest rates.interest rates are higher than long-term interest rates.
ECONOMICSECONOMICS
What is a Loan Loss Provision?What is a Loan Loss Provision?Banks set aside loan loss provisions to cover losses from bad loans.Banks set aside loan loss provisions to cover losses from bad loans.
MUTUAL FUNDS & ETFSMUTUAL FUNDS & ETFS
ETF Analysis: SPDR S&P Regional BankingETF Analysis: SPDR S&P Regional BankingLearn about the SPDR S&P Regional Banking Fund, an exchange-tradedLearn about the SPDR S&P Regional Banking Fund, an exchange-tradedfund (ETF) that invests in equities of regional banks located in the Unitedfund (ETF) that invests in equities of regional banks located in the UnitedStates.States.
MUTUAL FUNDS & ETFSMUTUAL FUNDS & ETFS
ETF Analysis: SPDR S&P BankETF Analysis: SPDR S&P BankExplore analysis of the SPDR S&P Bank ETF, and learn how the ETF tracksExplore analysis of the SPDR S&P Bank ETF, and learn how the ETF tracksthe banking sector and how investors can benefit from this ETF.the banking sector and how investors can benefit from this ETF.
STOCK ANALYSISSTOCK ANALYSIS
Who Are Wells Fargo’s Main Competitors?Who Are Wells Fargo’s Main Competitors?Explore information on the main competitors of Wells Fargo, the otherExplore information on the main competitors of Wells Fargo, the otherthree of the "big four" U.S. banks of Citigroup, JPMorgan Chase and Bank ofthree of the "big four" U.S. banks of Citigroup, JPMorgan Chase and Bank ofAmerica.America.
STOCK ANALYSISSTOCK ANALYSIS
Who Are Bank of America’s Main Competitors?Who Are Bank of America’s Main Competitors?Explore information and analysis on JPMorgan Chase, Wells Fargo andExplore information and analysis on JPMorgan Chase, Wells Fargo andCitigroup, the three banks considered the main competitors to Bank ofCitigroup, the three banks considered the main competitors to Bank ofAmerica.America.
Q: Q: Who decides when to print money in India?Who decides when to print money in India?The Reserve Bank of India, or RBI, manages currency in India. The bank's additional responsibilitiesThe Reserve Bank of India, or RBI, manages currency in India. The bank's additional responsibilities
include regulating the ... include regulating the ... Read Full Answer >>Read Full Answer >>
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Q: Q: What is the difference between a Debit Order and a Standard Order in a bank reconciliation?What is the difference between a Debit Order and a Standard Order in a bank reconciliation?While both debit orders and standard orders represent recurring transactions that must be consideredWhile both debit orders and standard orders represent recurring transactions that must be considered
in bank reconciliations, ... in bank reconciliations, ... Read Full Answer >>Read Full Answer >>
Q: Q: How can I cancel a bank draft that I have purchased?How can I cancel a bank draft that I have purchased?It is not commonly possible to cancel or stop payment on a bank draft since it, in effect, represents aIt is not commonly possible to cancel or stop payment on a bank draft since it, in effect, represents a
transaction that ... transaction that ... Read Full Answer >>Read Full Answer >>
Q: Q: How does investment banking differ from commercial banking?How does investment banking differ from commercial banking?Investment banking and commercial banking are two primary segments of the banking industry.Investment banking and commercial banking are two primary segments of the banking industry.
Investment banks facilitate the ... Investment banks facilitate the ... Read Full Answer >>Read Full Answer >>
Q: Q: Who generally structures a syndicated loan?Who generally structures a syndicated loan?Typically, either an investment bank or a commercial bank structures a syndicated loan. A syndicatedTypically, either an investment bank or a commercial bank structures a syndicated loan. A syndicated
loan is provided by ... loan is provided by ... Read Full Answer >>Read Full Answer >>
Q: Q: What role does a correspondent bank play in an international transaction?What role does a correspondent bank play in an international transaction?A correspondent bank is most typically used in international buy, sell or money transfer transactions toA correspondent bank is most typically used in international buy, sell or money transfer transactions to
facilitate foreign ... facilitate foreign ... Read Full Answer >>Read Full Answer >>
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