The longer that the bank keeps a non-performing asset on its books the greater the loss in NPV terms. Complex restructuring cases can drag on for years. Banks may retain foreclosed assets until such a time as property markets improve, and at times when serious imbalances between supply and demand exist this may be a matter of years. Underestimating direct costs. Complex restructuring cases can result in very high legal costs and banks may simply expense these costs as they arise.
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Underestimating the time to realization
Posted by admin on May 5th, 2010 | Comments Off
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