A Brief Comparison of the Bad Bank Experience across Jurisdictions
Bad Banks are typically Government sponsored Asset Reconstruction Companies (ARCs) setup with the primary objective of cleaning up bank balance sheets. Unlike private ARCs, the Bad Banks are setup as a one-time measure with the primary objective of reducing the build-up of Non-Performing Assets (NPAs) post a financial or economic crisis.
How to get the Bad Bank off to a good start
Clear statutory backing, clarity of objectives and an independent and professional management are key to the success of a bad bank. These components seem absent in the current structure.
