To ease these circumstances, the new, more liberal guidelines make it easier for banks to restructure loans to "creditworthy borrowers." They also indicate that a troubled loan that has been restructured and is now performing will not be negatively classified by government regulators, even if the property that collateralizes that loan has decreased in value, and even if the new, lower value is below the outstanding balance of the loan. By pushing the recognition of the lower value of the collateral into the future, banks will effectively be able to preserve the integrity of their balance sheets and, in so doing, present a stronger current capital position that will allow them to maintain or increase lending activities.

This measure will allow troubled banks, burdened by sizeable commercial real estate loan portfolios, to seek a respite from loan loss reserve requirements that effectively lower their capacity to lend. This relief for the banks will result in an easing of the tight credit conditions affecting commercial real estate transactions, although it is still too early to gauge the full impact of the new measures on commercial real estate sales.