Obama considering government-run 'bad bank' for decaying assets
President-elect Obama is considering a plan by the US Federal Reserve, Treasury and Federal Deposit Insurance Corporation that would see the government establish a bank to absorb bad assets from struggling private banks.
An announcement of a "fresh approach" to the worldwide economic crisis is expected by Obama's team "in the next few days," said Obama advisor David Axelrod, in a report by Reuters.
"'There are a range of things we're going to have to do to stabilize the financial community and part of it is going to involve housing, and part of it is going to involve how we approach this issue generally,' Axelrod said.
"In addition to steps to bolster banks, Obama officials want to attack aggressively the underlying causes of the credit crisis: the sharp downturn in the U.S. housing market and the related deterioration in mortgage-related assets.
"One of the sources said options being considered by Obama's team included the creation of a single national "bad bank," individual institutions to specialize in different asset classes, "bad banks" within existing large private banks, or some combination of the three."
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