bad bank

noun

Etymology

Possibly derived from a usage by Walter Bagehot in Lombard Street: "The cardinal maxim is, that any aid to a present bad bank is the surest mode of preventing the establishment of a future good bank."

Definitions

  1. A bank created to specialize in the ownership of defaulted loans and their collection.

    • And Grant Street National Bank, as the bad bank is called, ... The bad bank and its 75 workout specialists proved adept at unloading sorry loans
    • In the 1980s, another method of problem resolution emerged, known as a good-bank, bad-bank split model.

The neighborhood

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sense glosses and etymology drawn from English Wiktionary · source · CC-BY-SA