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

Question

Quizplus · Accepted Answer

Bad banks are created with the principal objective of separating good loans from bad loans, in order to maximize the asset values. This is achieved by transferring the bad loans to the bad bank, allowing the parent bank to focus on its core operations and improving overall financial health. Hedge funds, vulture funds, structured banks, and correspondent banks are not directly related to the objective of separating good loans from bad loans.

The Principal Objective in the Creation of _____ Is to Maximize