– by Meredith McAllister
Washington and Lee economics professor Linda Hooks was interviewed about a Portuguese bank and debt crisis on "Marketplace," the daily public radio show focused on national and international business news.
A multi-billion dollar rescue is underway for Banco Espirito Santo in hopes that that bank's problems will not escalate beyond Portugal. The bank is splitting in half, leaving toxic assets in the "bad" bank while allowing the strong assets stay in a "good" bank.
Hooks says in her interview that when the bad bank fences off or herds in its toxic assets, the good bank can thrive and go on with regular business of taking deposits and lending. The split will keep customers from pulling out all their money, causing chaos.
"Marketplace" is produced and distributed by American Public Media for broadcast by more than 500 public radio stations nationwide. It is heard by nearly 11 million listeners each week.