Moderator's comment: This contributor makes a number of interesting points, although some are no longer relevant with respect to the final version of the paper posted above. Furthermore, in light of the comments on the first page, it is useful to repeat the wording used in the EDG questionnaire. The actual wordings were:
Option 2: Primary loan valuation should be nominal value.
Continue to measure loans in the SNA at nominal values but use memorandum items to show other pertinent information, such as:
- Interest arrears on NPLs
- Realizable Loan Values
And Option 4: Primary valuation should be market-equivalent value throughout (retaining symmetry between debtor and creditor).
Measure loans at market-equivalent values (best estimates and might in practice be fair values or nominal values net of expected losses) for both assets and liabilities, and use memorandum items to show nominal values for loans and interest arrears on NPLs.
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