Wednesday, January 28, 2009

Report: FDIC May Run "Bad Bank"

by Calculated Risk on 1/28/2009 08:55:00 AM

From Bloomberg: FDIC May Run ‘Bad Bank’ in Plan to Purge Toxic Assets

The Federal Deposit Insurance Corp. may manage the so-called bad bank that the Obama administration is likely to set up ...

FDIC Chairman Sheila Bair is pushing to run the operation, which would buy the toxic assets clogging banks’ balance sheets ... President Barack Obama’s team may announce the outlines of its financial-rescue plan as early as next week, an administration official said.
...
The bad-bank initiative may allow the government to rewrite some of the mortgages that underpin banks’ bad debt, in the hopes of stemming a crisis that has stripped more than 1.3 million Americans of their homes. Some lenders may be taken over by regulators and some management teams could be ousted as the government seeks to provide a shield to taxpayers.
There is much more in the article.