A bad bank plan can be implemented in a centralized or decentralized manner. Under a decentralized plan, each troubled bank is split into its own good and bad bank. Under a centralized plan, all distressed assets in the banking sector are deposited in a single bad bank. If one bad bank were established for each of the three main pillars of the German banking industry – . for the credit unions, savings banks and private banks – this would also qualify as a centralized bad bank plan. Mixed solutions that combine private and public sector funding as well as centralized.
