Enhancement of multicriteria decision aid approach by reporting tools

Abstract

Evaluation of the level of soundness and stability of commercial banks is an idiosyncratic task, since banks have a complicated internal business structure, intertwined cash flows and strong influence of market conditions on their soundness levels. Methods of multicriteria decision aid (MCDA) provide clear and intelligible prompt evaluation in the form of rankings, which are designed to make comparisons of commercial banks. Nevertheless, more detailed evaluation must employ additional proprietary tools promptly exposing numerous specific data in a clear form. Reporting tools, simplifying thorough analysis of financial data, which exposes bank performance, are proposed in this paper. They help a decision-maker (depositor, bank management or a comptroller) to instantly observe both strength and weakness of commercial banks by categories of its performance criteria (capital, assets, management, earnings and liquidity) and dynamics of performance of a bank.