The ‘Bad-Asset Problem’

Horst Tomann

Chapter 16 in Palgrave Dictionary of Emerging Markets and Transition Economics, 2015, pp 314-328 from Palgrave Macmillan

Abstract: Abstract The bad-asset problem of transition economies had its origin in the system change. Though moral hazard problems were a concern when credible rules and structures had yet to be established, a strong case can be made for a thorough debt cancellation and balance sheet repair in the transition. This chapter reviews different strategies of how to distribute the burden and their impact on investment activity and growth, price stability, the future tax burden, and social security, respectively. It briefly describes how the bad-asset problem has been tackled in Europe, highlighting the role of the banks. Finally, an outlook is given on the recent financial crisis which led to an excessive inter-government lending. This new European ‘bad-asset problem’ calls for shared responsibility in fiscal policy.

Keywords: Enterprise Debt; Banking and Economic Development. (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-37138-6_17

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137371386

DOI: 10.1007/978-1-137-37138-6_17

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().