World Bank Prepares To Start Buying Troubled Assets.
"The World Bank is to set up a $5.5 billion vehicle to raise funds necessary to buy troubled assets from banks in emerging economies in order to help boost their balance sheets and free resources for crediting.... The new initiative will be partly funded by the International Finance Corporation (IFC), the World Bank's private sector division, which will allocate $1.5 billion of its own funds. The remaining $4 billion would be raised from partners ranging from private investors to international development institutions...." [ADPnews (UK)/Factiva]
The FT adds that "...the idea is to mimic the functions of a 'bad bank' at an international level through a number of platforms rather than a single global investment vehicle.... IFC Executive Vice President Lars Thunell told the Financial Times that dealing with distressed assets was critical in the near term to support global recovery....[Thunell] said the IFC was adopting a four-pronged approach. It plans to invest in service companies that manage distressed debt funds, team up with global banks to buy troubled assets, invest in some distressed debt funds and raise funds for its own asset management arm...." [Financial Times/Factiva]