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If a Bank Has Toxic Assets, Can Another Division of That Bank Invest in the Toxic Asset Program?

ATM keys; catatronic via Flickr

Question: Is it possible for a division of the bank holding toxic assets to participate in the [toxic asset] program?

Paul Solman: Supposedly not, but there’s lots of buzz about how banks might in practice get around the obstacle the government is setting up. Via swaps, for instance. (The methodology is a bit too complicated for this page.)

For more on the toxic asset program, see my explainer or this post on whether individual investors can participate.

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