Why doesn't the government treat this paper as ambiguous collateral on loans?

[disrupter]

Instead of foolishly paying some set number of dollars [of taxpayer's money] for this completely unknown paper,

why don't they treat it as ambiguous collateral on loans to these banks?

then the government liquidates the assets,
crediting whatever value is derived, less expenses, to the loan & then leaving the banking institution liable to pay the rest off over time?

Isn't that the prudent, rational thing to do?

what would be wrong with that?

[disrupter]

and if the institution goes bankrupt the taxpayer gets first dibs on the liqudation of the institution, until the loan is paid.