Risk.net

‘Bad banks’ through the ages

Deutsche Bank is setting up its second 'bad bank' since the financial crisis as part of its latest restructuring effort. It's a strategy that's been used by seven other big lenders in recent years to warehouse and unwind unwanted assets. Barclays, Bank of America, Citi, Credit Suisse, Lloyds, RBS and UBS all established special units to isolate toxic or illiquid investments post-crisis, some of which accounted for over one-third of their total risk-weighted assets at inception.