I don’t thing those loans would be very useful for the bank that buys discounted debt in that example. Being able to borrow with “bad” collateral is nice but th

I don’t thing those loans would be very useful for the bank that buys discounted debt in that example. Being able to borrow with “bad” collateral is nice but the main selling-point is not needing to recognize losses. If you don’t have unrealized loses to hide it doesn’t help much.