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English definition of “bad bank”

bad bank

noun [C]     BANKING, FINANCE, ECONOMICS
a bank that takes bad assets (= assets that have lost their value) and bad loans (= debts that are unlikely to be paid back) from other banks or organizations and deals with them in order to help with economic problems: The Treasury is creating a bad bank that will take on the toxic assets that have damaged the global banking system. The government has launched a bad bank to take over many of the 3.9 million credit card loans that are in arrears.
(Definition of bad bank noun from the Cambridge Business English Dictionary © Cambridge University Press)
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