Assessment of selected aspects of financial stability of the Czech banks

Iveta Palečková and Pavla Klepková Vodová

International Journal of Monetary Economics and Finance, 2021, vol. 14, issue 1, 23-34

Abstract: The aim of the paper is to choose which financial ratios are the most suitable for inclusion into the aggregate financial stability index for commercial banks, to examine the selected aspects of the financial stability and performance of the Czech commercial banks and their parent companies with the use of chosen financial ratios, and to construct aggregate financial stability index. We examined the aspects of financial stability of the Czech commercial banks and their parent companies. We focused on several aspects of financial stability: the banking profitability, efficiency, liquidity, solvency and asset quality. Results show that Czech subsidiaries were more profitable, solvent and liquid than their parent companies. Nevertheless, the Czech subsidiaries are less efficient than parent companies. Finally, we created the new aggregate financial stability index.

Keywords: profitability; efficiency; DEA; data envelopment analysis; solvency; liquidity risk; assets' quality; financial stability; commercial bank; financial conglomerate; Czechia. (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijmefi:v:14:y:2021:i:1:p:23-34

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