7  Finally, in the current uncertain environment, models and forecasts should necessarily be taken cum grano salis, in particular when determining the “terminal” level of key interest rates. Quantitative assessments are still useful, but their insights have to be assessed together with the information that will gradually become available on inflation expectations and on the evolution of wages and profits.
Moreover, as the time to liquidation increases, the uncertainty about the losses increases as well. The low prices offered for subprime-related securities in secondary markets support the impression that the potential for recovery through foreclosure is limited.