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According to the European Central Bank, almost all big banks in Europe are valued by the stock market at substantially less than the book value of their loans outstanding and other assets.
Roughly half of the book value of the country's bad loans is backed by collateral.
On March 19th the Financial Restructuring Authority (FRA) will auction assets with a book value of 229 billion baht ($6 billion)—mostly duff property loans seized from the 56 finance companies that the government closed down last year.
The TR is the book value of all non-performing assets divided by equity capital plus loan loss reserves.
The asset book value of $2.1 billion was based on 2005 prices and debts were $1.6 billion consisting of bonds totaling $1.16 billion and bank loans of $440 million.
The proportion of loan portfolio book value that a hedging portfolio requires ranges from 0.03% to 0.89%.
National City said it would probably record a $30 million accounting charge to reflect the lower value of loans on its books.
In the 1990s Mexico cleaned up its debt crisis by offering large government subsidies, of up to 60% of a loan's book value, to help pay down borrowers' debts.
Those rules concern when, and how, banks should write down the value of loans on their books.
The value of loans on its books worth 95% or more of the property's value almost doubled; indeed, those worth more than the home quadrupled.
An improving economy might make defaults seem less likely and cause banks to write up the value of loans on their books, thus raising reported profits.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com