It is hoped that, with toxicdebts off their balance sheets, the Nigerian bank will be able to attract new investors in the private market, and will be better placed to recommence fresh lending to support the economy.
There was also the possibility of setting up a special "bad bank" to take on the "toxic debts" of nationalised banks such as Northern Rock - which could eventually be sold on by the government when market conditions improve.
If the Big Three defaulted on their debts, holders of credit default swaps--which in recent years have grown like toxic weeds--would demand payment from those who wrote the insurance on the automakers' bonds.