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Kai Ryssdal: I’m not big on scary movies, but even I know you should stay away from zombies. They might look like human beings, but they’re only kept alive by something not quite natural. That’s what happened to banks in the Japanese financial crisis 20 years ago — they were drowning in debt but being kept on life support by the government. Now that phrase is starting to be bandied about here, for reasons I’m sure you can understand. And if you can’t, think Citigroup and Bank of America. From New York, Ashley Milne-Tyte reports.

Ashley Milne-Tyte: Roy Smith knows how to tell a staggering zombie bank from a healthy lender. He teaches finance at NYU’s Stern School of Business.

Roy Smith: The most visible tell-tale sign is the presence of a great deal of losses from a pile of assets that are known to be weak and subject to continuing write-downs. In other words, a series of poorly performing loans.

That sounds familiar. But Smith says there are big differences between the current state of some U.S. financial institutions and the Japanese zombie banks of the 1990s.

Smith: The Japanese banks were essentially covered up and left alone.

It took years for the Japanese government to deal with its zombie banks. Here, the government is already working with the banks to get bad loans off their books. Still, James Angel of Georgetown University says it’s not always easy to tell which banks are destined to be zombies and which will go on to lead healthy, productive lives.

James Angel: Have the regulators gone over the books in enough detail to determine whether this is a bank worth saving? You know, that’s the real question.

He says banks such as Citigroup may still be hiding bad news. He says even if Citi turns out not to be one of the walking dead, taxpayers have plenty to be sore about.

Angel: The danger in this case is that you know they require so many pints of blood to replenish their capital that the U.S. taxpayer winds up as the owner of the bank.

And if we rescue too many banks from a zombie nightmare they could end up bleeding us dry.

In New York I’m Ashley Milne-Tyte for Marketplace.