The move by regulators toward market value accounting of the loan portfolios will likely encourage sales of loans in the secondary markets.

Question

Quizplus · Accepted Answer

Market value accounting of loan portfolios would require banks to value their loans at their current market value rather than at their historical cost. This would increase transparency and reduce the likelihood of faulty valuations. As a result, banks may be more incentivized to sell their loans in the secondary markets, where they can net a higher price for these loans.

The Move by Regulators Toward Market Value Accounting of the Loan