Economic criteria characterising bank soundness and stability

Abstract

There are many different analysis methods for evaluation of complicated socio-economic processes. Banks are important participants of the market. Soundness and stability of banks is difficult to assess because of their complicated internal business structure, intertwined cash flows and strong influence of market conditions on bank’s performance. Multi-criteria methods of evaluation are among major methods being used nowadays for evaluation of complex socio-economic processes. A base for using such methods serves criteria representing these processes. Their relative importance is assigned by attributing proper weights to these criteria. Choice of criteria is essential part of analysis of soundness and stability of banks.