10:10 Economy: Government Creating A 'Bad Bank'?

The government is thinking about creating a 'bad bank.' Basically it's a way for the federal government to be able to buy up the bank's 'bad' assets, sell them when the market improves, and free up credit in the meantime. But two local bankers are not sold on the idea.

Blackhawk Bank President Rick Bastian says we shouldn't bail out institutions with taxpayer money. Bastian and Alpine Bank President Bill Roop agree there are better ways to fix the system.

"Resolution Trust back in the eighties seemed to be a better way of dealing with this. There were 700 to 800 savings and loans that were closed, the deposited were assumed by other institutions. The assets were put into this company and over a period of time and through a variety of channels, the assets were disposed to maximize the benefits of taxpayers, and the shareholders got what they should have: nothing."

"We all are big proponents, as I am of free enterprise but there are some troubling indicators out there that there are more bad assets, especially at the larger banks that they aren't able to get off their balance sheets."

Analysts say trouble assets for banks have reached two trillion dollars.


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