Third, and for me most tellingly, the article is wrong. Of course most bank loan portfolios are valued at cost. What else would you value them at? They are assets, and very few people choose to repay more than they are lent, in which case cost is the maximum value at which they might be stated in most accounts.
Is he actually that much of an ignorant?
He has, I suppose, heard of the concept if interest? Which is something additional which people pay over and above the amount they borrow. And, if it’s a fixed rate of interest (as would often be true of bonds) then the capital value can indeed rise above cost if interest rates fall.
True, loans tend not to be at fixed rates of interest. But they can certainly be at fixed premia to a floating rate. And if the company’s credit rating improves it may well be that the premium doesn’t change. Producing a loan which should righteously be valued at above cost if we are to gain a true and fair view.
True, that last is somewhat specialist. But the idea that loans can only ever be at cost and no more because people don’t pay back more than what they borrow is just ridiculous.