Zombie bank
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A zombie bank is a financial institution that has an economic net worth less than zero but continues to operate because its ability to repay its debts is shored up by implicit or explicit government credit support. The term was first used by Edward Kane in 1987 to explain the dangers of tolerating a large number of insolvent savings and loan associations and applied to the emerging Japanese crisis in 1993.[1][2] Zombie institutions face runs by uninsured depositors and margin calls from counterparties in derivatives transactions.[1][2]
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[edit] References
- ^ a b Kane, Edward J. (1989). The S&L Insurance Mess: How Did It Happen?. Washington, D.C.: Urban Institute Press. ISBN 978-0-87766-468-0.
- ^ a b "What Lessons Should Japan Learn from the U.S. Deposit-Insurance Mess?". Journal of the Japanese and International Economics (Elsevier) 7 (4): 329–355. December 1993. doi:10.1006/jjie.1993.1021. ISSN 0889-1583.
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