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View: How good is a bad bank?
The ultimate goal, however, should be to create a market for stressed loans so that banks can easily jettison the burden of bad loans, take a quick hit on their profits and move on with their business.
Synopsis
One has to factor in the enormous gains that accrue from enabling bad loan-strapped banks to function smoothly. That said, when policymakers talk of the imperative of making the bad bank a time-bound experiment, one must ask how this time period will be determined. This decision is easy when it comes to buying bad loans.
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