Features Of Applying Decision-Making Methods To Evaluation Of Financial Stability Of Commercial Banks Cover Image

Sprendimų Paramos Metodų Taikymo Ypatumai Vertinant Finansinį Komercinių Bankų Stabilumą
Features Of Applying Decision-Making Methods To Evaluation Of Financial Stability Of Commercial Banks

Author(s): Romualdas Ginevičius, Askoldas Podviezko
Subject(s): Economy
Published by: Vilnius Gediminas Technical University
Keywords: commercial banks; stability of banks; multicriteria methods; PROMETHEE; CAMEL.

Summary/Abstract: The problem of evaluation of financial state of commercial banks has an extensive century-long history. The relevance of the topic increases upon reappearing financial crises, such as the contemporary crisis. The stable performance of financial intermediaries, mostly commercial banks in the bank-based system of Lithuania, ensures effective performance and growth of the economy in the country. The evaluation of stability of commercial banks is a tangled task, as their financial state depends on various conflicting criteria. Three major categories of evaluation methodologies are distinguished: rating agencies‘ methodologies, and methodologies where econometric-statistical methods and decision-making aid (MCDA) methods are used. A survey of mentioned methodologies is provided, qualities of MCDA methods, which furnish prominence over other methods used in the evaluation of registered in Lithuania commercial banks are described. The proposed in the paper methodology is applied to the case of evaluation of eight major commercial banks registered in Lithuania.

  • Issue Year: 13/2012
  • Issue No: 4
  • Page Range: 314-323
  • Page Count: 10
  • Language: Lithuanian