term ) factors affecting the global economy, and in thinking about how to return to higher output and productivity growth, policymakers are focusing on the uses of monetary policy in attaining the dual goals of maximum employment and stable prices and in maintaining financial stability. they need also to strengthen financial sector regulation and supervision to reduce the probability of another crisis. at the same time, and although i earlier foreswore discussion of fiscal policy, it is clear that fiscal policies can be used both to increase growth and to deal with potential problems of financial stability. i look forward to hearing your views on the best way to move ahead on these and the other important issues we have gathered to discuss. thank you. bis central bankers ’ speeches

in perception is through welldocumented facts. for example, to support the value of a construction project, the bank would need current information on the project status, including an estimate of the cost to complete. it would also need documentation of the method of realizing value for the completed project. for instance, if the borrower has a take - out permanent loan commitment, the file should include an update on the status of the commitment including any conditions to closing. if the property is under a sales contract, the bank should document the buyers ’ continued willingness and ability to close. if the bank is relying on other resources of borrowers or guarantors for repayment, it should have global cash flow information to be able to assess their ability to continue to carry the loan until conditions improve. the fact that the loan has a good payment history and is performing is important, but not sufficient to make the case that resources are available to keep it current in the future. finally, the bank should have either a current appraisal or sufficient current market information to credibly update the assumptions in the most recent appraisal. if market conditions are changing rapidly, “ current information ” may need to be more up - to - date than is usually the case. examiners generally are not expected to challenge the underlying valuation assumptions, including discount rates and capitalization rates, used in appraisals or evaluations when these assumptions differ only in a limited way from norms that would generally be associated with the collateral under review. loans will be classified and valued on the basis of cash flow first, and collateral value second. assessments of cash flow and valuation will be much more reliable if based on solid documentation. in the absence of documentation, examiners will have to make assumptions. most loans should fall into one of three categories : first, if available cash flow, including the willingness and ability of any guarantors to provide cash support, is sufficient to carry a construction project to completion or to amortize a completed project on reasonable terms at a market rate of interest, the loan should not be classified ; if, on the other hand, there is no available cash flow to carry the loan and repayment can only come from the sale of the collateral, an amount equal to the value of the collateral less selling expenses will be classified and any remaining amount charged off ; and finally, if cash flow is sufficient to partially amortize the loan, the bank may be able to restructure the loan into