Bad bank model, German (German bad bank model)

Regulations adopted in Germany in 2009 following the Financial Market Stabilization Act (FMStG), which came into force in October 2008, to eliminate remaining uncertainties for the financial system and the real economy. This is because the FMStG only targeted the liabilities side of banks and was unable to resolve the uncertainty regarding the items booked on the assets side. In spring 2009, it was estimated that there was EUR 200 billion in toxic assets. The banks were now able to write these off over a longer period of time without releasing the institutions from causation-based loss liability. – See bad bank, financial crisis, financial market stabilization agency, moon price, nothing, on-balance sheet, papers, toxic, subprime crisis – Cf. Monthly Report of the Deutsche Bundesbank of May 2009, p. 56 et seq. (bad bank model in its main features; assessment of success), Annual Report 2009 of the Deutsche Bundesbank, p. 93 (brief summary of the bad bank law).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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