Why a bad bank needs to be big

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Daniel Gros
Financial Markets, CEPS Commentaries
05 February 2009
3
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Daniel Gros argues in this Commentary that the key choice facing the US government is the fundamental one between muddling through with partial recapitalization schemes that leave banks alive, but too weak to lend or a big bang approach that clears balance sheets and allows the survivors to resume lending without looking back.