0 a financial asset (= something a person or company owns) whose price has fallen by a large amount and that cannot be easily sold --
Academic research suggests that if the government bought common stock or toxic assets in troubled banks that the debt overhang problem would be better corrected.
Removing toxic assets would also reduce the volatility of banks' stock prices.
Topics covered include credit default swaps, collateralized debt obligations, toxic assets and write-downs.
To use an analogy, it is the upstream problem of homeowners defaulting that creates toxic assets and banking insolvency downstream.
Markets for some toxic assets froze in 2007, and the problem grew much worse in the second half of 2008.
Removing toxic assets would also reduce the upward volatility of banks' stock prices.
In many cases, the long-term assets purchased were mortgage-backed securities, sometimes called toxic assets or legacy assets in the press.
He intended to direct $50 billion towards foreclosure mitigation and use the rest to help fund private investors to buy toxic assets from banks.
