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IHS/WIFO: Austrian Hypo Group Needs Bad Bank

Politics ♦ Published: September 16, 2013; 07:03 ♦ (Vindobona)

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Christian Keuschnigg and Karl Aiginger claim that the nationalized Austrian bank should be split into a “good” and a “bad” part. Austria´s public debt would increase substantially.

IHS/WIFO: Austrian Hypo Group Needs Bad Bank / Picture: © Vindobona.org

Keuschnigg, chief economist of the Austrian Institute of Advanced Studies, argues that the nationalized bank needs a separation between good and bad assets. The creation of a bad bank would cause a sudden increase of the budget deficit and of the public debt level. As a result, Austrian Minister of Finance Maria Fekter is strictly against this proposal. In total, the budget deficit…