The Obama administration is considering the creation of a “bad bank” to buy up billions in so-called toxic assets. We’re taking an in-depth look at this seemingly counter intuitive proposal — a proposal that could cost in excess of $2 trillion. Can bad banks be a good thing? The Takeaway is joined by Jane Sasseen, Washington Bureau Chief for BusinessWeek
, and Freakonomics
author Stephen Dubner.
"They can borrow money a lot cheaper, so they don't need as much of a return. They don't even necessarily need a return at all. Whereas for a private investor to go in and do this right now, it is going to need a 10 or 15 percent return to take the risks involved."
— Jane Sasseen of BusinessWeek Magazine on the government creating a "bad bank" to help buy up toxic debt