25-72 The principal objective in the creation of _____ is to maximize asset values by separating good loans from bad loans

Question

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Bad banks are created to maximize asset values by separating good loans from bad loans. They are established by governments or central banks to take over nonperforming or toxic assets from commercial banks, allowing them to start afresh. This helps to prevent a collapse of the banking system and the flow of credit to the real economy.

25-72 the Principal Objective in the Creation of _____ Is