oldschool
Active Member
This is a thread to explain or discuss why the numbers between the government plan and the others are different, since its causing confusion. Im not an economist but this is what i understood.
Basically they all have the same numbers of who owes what to whom and when.
BUT:
In the government plan, debts that are due after many years are considered to be defaulted. The others are saying, wait, from now until then, we can redress and repay those debts.
Also, in the government plan, some bank loans that have guarantees are considered to be defaulted and so the banks are saying our losses arent that much because we have guarantees for them.
So people might look at this logically and say, so the government is really overestimating the losses and we should reduce those numbers.
BUT,
The standard IMF and many accounting approaches is to treat these as losses now and consider them defaulted. Why? Because they consider that they are giving you now a new loan, and if youre burdened with other loans that you have to repay, then that makes you a less desirable candidate for new loans.
As for the guarantees that the banks have, i understood again that its standard for many to also require provisions against these loans.
So basically, they all have the same numbers. How you interpret them can be different. Ultimately, its the people giving you money who will decide, and usually the IMF takes the government approach (which is why the government took it).
If you wanna take a different approach, then you have to find someone who accepts it. and would accept to give you money for it.
Now the disadvantage of the government plan is it absolves the state from its debt to the banks and therefore where are you gonna get the deposits back from? The sandou2 siyede which is very vague.
But the Kanaan approach, while it stays that the state should still be liable for these, also doesnt specify where it would get them from, but supposes an economic recovery which would be hard without people loaning you money in the first place.
I probably did a shit job understanding and explaining things but people think that each side is making errors in calculations which isnt true. Its simply a question of policy and of being able to find someone who loans based on each approach.
Basically they all have the same numbers of who owes what to whom and when.
BUT:
In the government plan, debts that are due after many years are considered to be defaulted. The others are saying, wait, from now until then, we can redress and repay those debts.
Also, in the government plan, some bank loans that have guarantees are considered to be defaulted and so the banks are saying our losses arent that much because we have guarantees for them.
So people might look at this logically and say, so the government is really overestimating the losses and we should reduce those numbers.
BUT,
The standard IMF and many accounting approaches is to treat these as losses now and consider them defaulted. Why? Because they consider that they are giving you now a new loan, and if youre burdened with other loans that you have to repay, then that makes you a less desirable candidate for new loans.
As for the guarantees that the banks have, i understood again that its standard for many to also require provisions against these loans.
So basically, they all have the same numbers. How you interpret them can be different. Ultimately, its the people giving you money who will decide, and usually the IMF takes the government approach (which is why the government took it).
If you wanna take a different approach, then you have to find someone who accepts it. and would accept to give you money for it.
Now the disadvantage of the government plan is it absolves the state from its debt to the banks and therefore where are you gonna get the deposits back from? The sandou2 siyede which is very vague.
But the Kanaan approach, while it stays that the state should still be liable for these, also doesnt specify where it would get them from, but supposes an economic recovery which would be hard without people loaning you money in the first place.
I probably did a shit job understanding and explaining things but people think that each side is making errors in calculations which isnt true. Its simply a question of policy and of being able to find someone who loans based on each approach.