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Hence, we apply flat haircuts to the collateral values to adjust the collateralization ratios and explain the recovery rate again.
Refinancing difficulties are also a problem, it said, "because collateral values have declined significantly since these loans were originated".
Regulators were slow to force banks to recognise the problem of collapsed collateral values, but they did require banks to meet new international standards for capital.
As prices go up, a deadly feedback loop forms: rising collateral values enable banks to extend more credit, which means prices can be chased higher.
Decreased loan supply would then lower aggregate demand and collateral values, further reducing access to finance and thereby economic activity, and in turn, increasing losses to the financial sector," the IMF warns.
Of that total, $818 million was for the reduced value of companies Boeing bought and $159 million was for write-downs in its finance portfolio, reflecting the decline in airline customers' credit ratings, jet collateral values and a steep fall in aircraft lease rates.
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We follow this approach and employ the collateralization ratio (CR) by dividing the total collateral value by the EAD: begin{aligned} mathrm{CR}_{j}= frac{sum _{i=1}^{m_{j}}{mathrm{CV}_{i,j}^{mathrm{real,, estate}}} + sum _{i=1}^{n_{j}}{mathrm{CV}_{i,j}^{mathrm{deposit}}}}{mathrm{EAD}_{j}}.
The only thing in Afghanistan that could possibly count as collateral value is its citizenry.
Cars much more than a year old may be rejected as having too little collateral value.
But there turns out to be something else, a collateral value to Ingstad's life for those who remember him.
And homeowners can borrow or refinance non-housing debts using the increased collateral value of their property.
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