These two models of asset restructuring – one private and the other quasi-government – share many common features with approaches that have been adopted for resolution of stressed assets in history: Sweden (“Securum” and “Retriva”) in the early 1990’s; in the United States in dealing with the Savings and Loans Crisis (“Resolution Trust Corporation”); in Japan (post-1998 via its Deposit Insurance Corporation); in Indonesia (“IBRA”), Malaysia (“Danaharta”) and South Korea (“KAMCO”) to deal with the South East Asian crisis; and more recently, in Ireland (“NAMA”), Spain (“Sareb”), and again the United States (“TARP” along with Fannie Mae, Freddie Mac and Federal Housing Administration).
By comparison, in the US the equivalent proportion is only around 30%. This reflects the fact that the US financial system is primarily market-based. In the euro area, guaranteeing steady access to credit for households and companies largely means preserving the viability of the banking system.