Zombiebank

As a zombie bank, a bank is called, which is actually insolvent, but continues to exist and banking business. This polemical, derived from the English term was used in the wake of the financial crisis from 2007 in the German language area.

Term

Was first used the term zombie bench in 1987 by Edward J. Kane, then a professor of banking and monetary policy at Ohio State University. He pointed to the dangers that arise when actually insolvent banks and insurance companies are allowed to continue in the market. Later, Kane warned of the impending Japanese banking crisis. Also used in his work on the peso crisis of 1994 and the Asian crisis in 1997 and 1998, the now acting professor at Boston College the term. The Harvard professor Niall Ferguson used the term at the World Economic Forum in Davos in 2009 and said it long ago give such institutions in principle, although it was "too polite " to say so.

A zombie bank is therefore a financial institution through credit default or speculative losses actually already a significant negative net asset value ( net asset value ), but in its balance sheet still has a positive book value, as bad loans and receivables still as assets that are actually already had have to be written, are reported. The management of a zombie bank is instead trying to delay this write-offs and to conceal the existing problems, as this would lead immediately to a Bankenrun. In this case, the bank would not only be in debt, but also illiquid - that is insolvent. The management hopes in this phase typically a saving investor or government support, there may be criminal but already the / of negligent or fraudulent insolvency / bankruptcy offense or Insolvenzverschleppung guilty.

On the origin of the name see zombie.

Demarcation

The zombie bank is not to be confused with the bad bank, which was founded by the government or banking associations, with the aim to take over bad loans and receivables of troubled banks.