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Methods used by banks when taking medium term and long term financing decisions

Author

Listed:
  • Delia DAVID
  • Luminita PAIUSAN

    (Vasile Goldis „West University of Arad”)

Abstract

Banks contribute through their work to financial developments as they ensure at least the necessary structure for the market economy. The lending activity of banks takes place in accordance with the national regulations specific to each country individually and it supports the facilitation of the business conduct as well as of the one belonging to non-financial clients. The lending methodology varies from one bank to another depending on the national policy of each one and also on the policies specific to the Central Bank existent in each country. The loan lending process requires a detailed analysis on the behalf of the bank so as to cover the default risk. The purpose of this paper is to examine the possible methods used by banks with the purpose of estimating the cash flows and the related growth rates for those medium-term and long-term loans granted to legal entities.

Suggested Citation

  • Delia DAVID & Luminita PAIUSAN, 2012. "Methods used by banks when taking medium term and long term financing decisions," Anale. Seria Stiinte Economice. Timisoara, Faculty of Economics, Tibiscus University in Timisoara, vol. 0, pages 431-439, May.
    • Handle: RePEc:tdt:annals:v:xviii:y:2012:p:431-439
    as

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    File URL: http://fse.tibiscus.ro/anale/Lucrari2012/kssue2012_066.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    credit; risk; analysis method; cash flow; growth rates;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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