Adverse Selection 101: The Real Reason Why Balance Sheet Detoxification Has Failed
by Kenneth N. Kuttner | July 1st, 2009 | 05:07 pmThe Treasury’s efforts to detoxify banks’ balance sheets have been a flop, to put it bluntly. Troubled Asset Relief Program (TARP) funds were initially earmarked to purchase banks’ bad assets, but confusion about finding the right price led to the plan’s abandonment. And now the much-touted Public Private Investment Partnership (PPIP), a program that would [...]