development of a methodology of evaluation of financial stability of commercial banks
;Brauers Willem Karel M.;Ginevičius Romualdas;Podviezko Askoldas
clinical and experimental pharmacology & physiology2014Vol. 61pp. 349-367
171
m.2014panoeconomicusdevelopment
Abstract
The field of evaluation of financial stability of commercial banks, which
emanates from persistent existence of financial crisis, induces interest of
researchers for over a century. The span of prevailing methodologies
stretches from over-simplified risk-return approaches to ones comprising
large number of economic variables on the micro- and/or macro-economic level.
Methodologies of rating agencies and current methodologies reviewed and
applied by the ECB are not intended for reducing information asymmetry in the
market of commercial banks. In the paper it is shown that the Lithuanian
financial system is bankbased with deposits of households being its primary
sources, and its stability is primarily depending on behavior of depositors.
A methodology of evaluation of commercial banks with features of decreasing
information asymmetry in the market of commercial banks is being developed by
comparing different MCDA methods.