What does toxic asset mean?

Definitions for toxic asset
tox·ic as·set

This dictionary definitions page includes all the possible meanings, example usage and translations of the word toxic asset.


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Wikipedia

  1. Toxic asset

    A toxic asset is a financial asset that has fallen in value significantly and for which there is no longer a functioning market. Such assets cannot be sold at a price satisfactory to the holder. Because assets are offset against liabilities and frequently leveraged, this decline in price may be quite dangerous to the holder. The term became common during the financial crisis of 2007-2008, in which they played a major role. When the market for toxic assets ceases to function, it is described as "frozen". Markets for some toxic assets froze in 2007, and the problem grew much worse in the second half of 2008. Several factors contributed to the freezing of toxic asset markets. The value of the assets were very sensitive to economic conditions, and increased uncertainty in these conditions made it difficult to estimate the value of the assets. Banks and other major financial institutions were unwilling to sell the assets at significantly reduced prices, since lower prices would force them to reduce significantly their stated assets, making them, at least on paper, insolvent. Toxic assets are also euphemistically labeled troubled assets.

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Numerology

  1. Chaldean Numerology

    The numerical value of toxic asset in Chaldean Numerology is: 9

  2. Pythagorean Numerology

    The numerical value of toxic asset in Pythagorean Numerology is: 9

Examples of toxic asset in a Sentence

  1. Doug Kass:

    Reflecting operating losses and a toxic asset book of European loans and sovereign debt, Deutsche Bank trades at only one-third of overstated shareholders equity compared with Citigroup at 90 percent of shareholders equity and JPMorgan at 1.8 times capital.

  2. Alan Greenspan:

    Leverage is a disaster for markets -- and we try to avoid it, but we fail every time, there are always toxic assets, you just never know, which ones are viable. Right now... it's hard to tell what the toxic asset is.

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"toxic asset." Definitions.net. STANDS4 LLC, 2024. Web. 28 Mar. 2024. <https://www.definitions.net/definition/toxic+asset>.

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