Loss
What does it mean
Regulatory Definition: Assets classified loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be effected in the future.
Why does it matter
Bank regulators closely monitor and exert significant influence over bank performance through their established rules and guidance. Hence, it is crucial for banks to comprehend regulatory terminology. This understanding enables them to identify loan relationships that align with regulatory criteria or to defend those that don't meet the specified standards.
Other Relevant Terms
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