ArgumentBankingLetter
Buying a bank's bad assets helps only if you overpay; giving it capital helps directly
A rescue that swaps assets at fair value changes nothing; only new capital changes a bank's solvency.
Banking crises, bailout design, and the interview question of what a capital injection does that asset purchases do not.
From John Hussman's October 2008 market comment on recapitalising the banks · John Hussman