A multi-criteria analysis of the banking system in the Republic of Croatia

Abstract

višnja vojvodić rosenzweig, hrvoje volarević, mario varović: a multi-criteria analysis of the banking system in the republic of croatia financial theory and practice 37 (4) 403-422 (2013) 403A multi-criteria analysis of the banking system in the Republic of Croatia introductionThe purpose of the paper is to show the usefulness of multi-criteria decision-making in an analysis of the strategies of economic agents that are all in the same economic activity. The analysis will use a mathematical model of multi-criteria decision making, which will contain a number of the different individual criteria that are usually used in the framework of this branch of the economy. The analysis and ranking of the banking system according to the criteria selected in the model are applied in accordance with the preferences of the decision makers. The mathematical model for multi-criteria decision making presented will contain nine individual criteria classified into three basic groups -profitability, security (or risk) and liquidity -which are the interlinked components of financial management. The paper will formulate the problem of goal programming in which the goal of the bank is determined by the level of a single indicator from a group of cognate indicators, and the closest operational performance to the goal established is sought.