WASHINGTON(Reuters) – Cerberus Capital Management Chairman John Snow said on Wednesday private capital is waiting on the sidelines until toxic assets are cleared from troubled banks.
Snow, a former U.S. Treasury secretary, said institutions that are insolvent should go into receivership and not be allowed to hang around.
“Until private capital starts to come back into the banking system we are likely to have the zombie banking problem,” Snow said at a U.S Chamber of Commerce event on financial regulation.
“Private capital isn’t going to come in until there is a clearing away of debris inside the banking system — toxic assets,” Snow said. (Reporting by John Poirier and Karey Wutkowski, editing by Dave Zimmerman)