The latest proposals involve numerous funds with mixed financing. Economists have recently suggested that funds should compete with each other to acquire assets from individual banks and government share capital. The German government’s bad bank plan proposes a special purpose vehicle (SPV) for each participating bank. The SPV would transfer government bonds at some discount to the participating bank in exchange for the toxic assets (see Section 6 for a detailed discussion). The proposal made by the Association of German Banks (BdB), in which an account would be set up for each bank in need of assistance, is.
