Toxic assets

Toxic assets

In the context of the 2007-2009 recession, the term refers to assets like mortgage backed securities and collateralized debt obligations that are illiquid and difficult to value. If the value of the underlying assets falls significantly, these securities could lose value rapidly (aggravated by the lack of liquidity and transparency in price) which could lead to significant write-downs (and hence losses) for holders of these toxic assets.
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At the end of October Hypo officially turned into a bad bank called Heta Asset Resolution which should wind down about EUR 18 billion of toxic assets.
The City was also cheered by an update on the lender's internal bad bank - set up to dispose of toxic assets.
Chief executive Ross McEwan said the results showed the underlying strength of the business, but warned there remained "bumps in the road ahead" as it continued to deal with scandals of the past and dispose of toxic assets.
8billion hit it recently took to create a "bad bank" where it could hive off toxic assets.
3 billion will be given out of the National Oil Fund to back the Toxic Assets Fund.
A BAD bank would buy up toxic assets from troubled banks -- for example, non-performing loans (NPLs) -- at a discount and then try to sell any collateral for profit, if possible.
It was also part of the agreement RBS had reached in 2009 to shelter PS282 billion of toxic assets in the government's Asset Protection Scheme.
It means Ulster Bank's toxic assets will be ring-fenced with its parent bank's debts.
CHANCELLOR George Osborne has admitted Royal Bank of Scotland is unlikely to be re-privatised before the 2015 general election as he opted for a faster run-down of the bank's toxic assets.
Anand Sharma, Indian minister for Industry, commerce and textiles, has said that Indian banks are not exposed to toxic assets.
SeeNews) - Nov 8, 2012 - Some London-based investment funds are interested in the acquisition of toxic assets from Spanish bad bank Sareb, if the Spanish government secures funding for such purchases, local daily Expansion said today.
If accounting rules are preventing NCUA from successfully separating toxic assets from corporate balance sheets without realizing additional losses, the regulator has another option: remove the performing assets instead.