In comparing simulated to real data on bad debt, however, a word of caution is appropriate.
Costs were high because of low labour productivity, a large presence of expatriate staff and considerable bad debt.
When a firm goes bankrupt, the bank records a nonperforming loan or "bad debt," which will affect its own equity base negatively.
In fact, if a large firm goes bankrupt, the aggregate output loss is significant, bad debt spreads through a domino effect and propagates the shock.
At this stage we do not know what the bad debt ratios are likely to be.
It will inevitably take time, and we must wait to see how the scheme develops and how the bad debt position turns out.
They simply write off the debt as a bad debt.
Also, the bad debt record of housing associations is far better than any other part of the property sector.