• A zombie bank is an insolvent financial institution that is able to continue its activities thanks to explicit or implicit support from the state.

  • Zombie Banks are kept afloat to prevent panic from spreading to healthier Banks.
  • The term zombie bank was first coined by Edward Kane of Boston College in 1987 in connection with the S&L crisis.
  • Restoring the health of zombie banks could cost hundreds of billions of dollars, slow economic growth and prevent investors from looking for better opportunities elsewhere.