Bad bank

Definition:

A government owned entity that takes over and liquidates toxic assets from failed or declining financial institutions to leave them with a clean balance sheet. The strategy was last used during the Savings and Loan crisis of 1980s where this entity was called the Resolution Trust Corporation.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Force Majeure

Events outside the control of the parties. These events are acts of man, nature, governments and regulators, or impersonal events. Contract performance is forgiven or extended by the period of force... Read More

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