Video: Bad Banks Might be Good

Part of the bank rescue plan (for now) involves bad banks. What are bad banks and what do they do?

Bad banks are designed to get toxic assets out of otherwise good banks. By doing so, the bank can again appear strong and can continue to do business. If the toxic assets stick around, the bank will have a hard time getting back on its feet.

The concept is confusing, but the Marketplace Whiteboard might help you make sense of bad banks. You'll see a metaphorical expedition across the ice, where participants find that they've got some junk they don't want. Paddy Hirsch shows us how the idea works and what some of the problems are.

Further reading:

• What are Bad Banks?
• Mortgage Crisis Causes