Moreover, while we exclude losses beyond 2011, this limit would only be material for sizing the capital buffer if those losses were expected to substantially exceed pre-provision earnings after 2011, an outcome that we do not expect. Second, a few private-sector estimates implicitly or explicitly assumed mark-to-market or liquidation prices for loans, which effectively incorporate a substantial liquidity discount in today's market.
However, because banks are portfolio lenders with core deposit funding and the ability to hold loans to maturity, our estimated valuations are based on projected cash flow credit losses related to a borrower's failure to meet its obligation, not a liquidation value.