Bad Bank Proposal for India: A Partial Jubilee Financed by Zero Coupon Perpetual Bonds

There have been two main proposals to tackle the stressed assets problem of Indian banks since the beginning of this year. Both proposals are based implicitly on the financial intermediation theory of banking. The alternative credit creation theory of banking opens up other possibilities. One such p...

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Bibliographic Details
Published in:Economic and political weekly 2017-03, Vol.52 (10), p.12-15
Main Author: ÖNCÜ, T SABRI
Format: Article
Language:English
Subjects:
Bad debts
Bank reserves
Banking industry
Bond issues
Central banks
COMMENTARY
Debt
Deflation
Financial analysis
Financial institutions
Politics
Proposals
Public sector
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Summary:There have been two main proposals to tackle the stressed assets problem of Indian banks since the beginning of this year. Both proposals are based implicitly on the financial intermediation theory of banking. The alternative credit creation theory of banking opens up other possibilities. One such possibility is a partial Jubilee financed by zero coupon perpetual bonds.
ISSN:0012-9976
2349-8846