The US and Europe should establish "bad banks" to absorb toxic assets in order to contend with the global financial crisis, the Financial Times reported, citing comments from the head of China’s largest bad bank. Tian Guoli, CEO of Cinda Asset Management Corporation, said Western economies run the risk of slipping into a long period of recession and stagnation, as was seen in Japan. "Japan waited too long to remove bad assets from their banks and when they finally set up a bad bank, it was too late," he said. China’s four bad banks, or asset management corporations (AMCs), were established in 1999 and modeled on the US Resolution Trust Corporation. The AMCs helped revitalize China’s banking sector, but analysts say they merely shifted bad assets without solving the underlying problems. According to Tian, AMCs have received US$350 billion in non-performing assets from China’s banks, with Cinda taking US$146.2 billion of that figure.