Econometric modelling of bank activities: value-based approach to the problem loans terms’ rescheduling

The permanent state of the financial crisis has predictably brought to forefront such traditional problem banking as loans. This research aims work out an econometric approach solution loans terms’ rescheduling. For this purpose, we, firstly, treated credit a bank’s investment project with cashflows’ chart including initial outflow (principal) and following inflows represented by loan payments. Secondly, we combined schematic representation loan’s cashflows NPV formula accustomed it allowed create models for three types loan: classic, annuity, serial. Thirdly, case when borrower breaks payment schedule leads reduction loss wealth shareholders, respectively, outlined special compensative where default in is interpreted lender additional forced loan. We suggested modifying terms (interest rate or effective period agreement) rest periods. Fourthly, laid loans’ top corresponded made possible get formulas calculating modified interest number periods aid backward calculation. As result, developed modifications based on prolongation increasing rate.