Section 10 Valuation

In assessing whether the value of the cover pool exceeds the value of preferential claims under the Financial Institutions Act section 2-31, loans, interest rate contracts and foreign exchange contracts and substitute  assets shall be valued at prudent market value. Bank deposits redeemable at notice up to 30 days and floating rate loans may be valued at nominal value. Bond issues shall be valued at the sum of the discounted value of nominal and discounted coupon payments. SFA may lay down further rules on the discount rate as mentioned.

Property furnished as collateral for residential mortgages and commercial mortgages shall be valued in accordance with the Financial Institutions Act section 2-29 first paragraph. The Capital Requirements Regulations section 17-1 concerning general requirements as to security provision, section 17-6 first paragraph c) and d) concerning valuation of real estate and section 18-4 first paragraph a) concerning  prudent market value apply correspondingly.