Basic Action Super Heroes!

Page 69 of the UE book talks about Villains being able to use Setbacks like Hero Points. I'm a little unclear about something: where are the Setbacks coming from? Are they the Villain's because he's over the Point Limit of the campaign (i.e., a 50-pt. Villain has 10 Setbacks against a 40 pt. Villain), or is he spending the Hero's Setbacks (if any) against the Hero?

The Narrator gets 2 Setbacks per player at the start of a game. Villains can use these.

In addition, a Hero who has their own setbacks can have those Setbacks spent by a villain (or just about any other roll) but only against that particular Hero.