The toxic assets responsible for the explosion of the ongoing credit crisis are still festering on bank balance sheets. The idea that governments could step in and buy up these illiquid assets and place them in a “bad bank” is gaining favor among market watchers and some told CNBC it could be the way out of the problems.
Good Idea to Set Up a 'Bad Bank'
The US proposal to set up a "bad bank" to purchase firms' toxic assets will certainly be a move in the right direction, says Shane Oliver, head of investment strategy & chief economist at AMP Capital Investors. He explained to CNBC why.
Toxic Asset Clean Up Will Boost Financials
The US government's massive $825 billion economic stimulus package passed the House on Thursday. Jack Bouroudjian, chairman at Capital Markets Technology, gives his take on the rescue plan and says the government's target on bad bank assets is what many observers have been waiting for.
'Bad Bank' a Good Idea?
Dariusz Kowalczyk, chief investment strategist at SJS Markets, believes that stimulating domestic demand will address the root of the U.S. problems more than creating a 'bad bank'.
Pricing Toxic Assets
As the US government looks to buy up toxic assets from its affected banks, Georges Pauget, CEO of Credit Agricole, says it remains difficult to price the assets.
Fed Shouldn't Buy Long-Term Treasurys
If the Fed does go ahead and purchase long-term Treasurys, it will be negative for the dollar, particularly in the longer-term, says John Noonan, senior FX analyst at Thomson Reuters.
A Tax Holiday Beats Government Bailouts
Governments can look into giving a tax holiday, instead of bailing out failing institutions and firms, as a way to solve this credit crisis, says Hans Goetti, CIO of LGT Bank in Liechtenstein.
'Vicious' Recovery Coming: Sorrell
This year is going to be a very tough year, but there could be "vicious" recovery in the second half and into 2010, Sir Martin Sorrell, CEO of WPP, told CNBC in Davos.
Ride the Wave of Money
As the governments of Europe and the US move to quantitative easing, new investment opportunities will emerge, Alan Capper from Pinnerpark Investments explained to CNBC.
Toughest Year Since the War?
"This is probably the toughest year for the global economy since the end of World War II," Stephen Roach, chairman of Asia of Morgan Stanley, told CNBC at Davos.