recently read that a problem should be with the bad bank approach to the assessment of non-assessable "toxic" assets.
NB: The removal of the said assets from bank balance sheets, the world is likely to probably without exaggeration, the necessary (st) e be a condition of ending the financial crisis and for a future economic upturn. As long as the banks' balance sheets are loaded like this, threatening bankruptcy and everything else (government stimulus trials) avail nothing.
The toxic plants but do not need to be evaluated, and the valuation is trivial. As compensation for such systems is a good banking simply provide as much resources as it needs to be solvent, therefore, have to get back enough money.
are specifically, for different variants. For example, acc. Buiter an insolvent bank in a good and a bad new is old divides. One half retains the toxic levels and the existing share capital, the bank receives the new substance and new capital. Whether these first-best solution is politically feasible is another matter. In principle, the same approach has been proposed previously already Fama .
These newer approaches would be taken into account in a second round of government intervention, even if only to minimize the costs of such actions for the taxpayer. In Switzerland, I see the problem that our bankruptcy law has not fatally, by the nature of Chapter 11. Whether the exercise skills FINMA here knows I can not. Innovative ideas are needed ...
