Levy threat defeats purpose of creating bad bank, claims FT

REACTION to the bad bank announced by Finance Minister Brian Lenihan on Wednesday evening has been mixed.

In its editorial columns yesterday, the Financial Times warned there was no point in having a bad bank that absorbed none of the risks of the assets being acquired.

The article said the imposition of a levy totally undermined what the State was trying to achieve, because it left the banks’ balance sheets exposed to the bad debts on transferred loans.