Title
Ranking of the Lithuanian Banks during the recession of 2008-2009 by the MULTIMOORA Method
Author
Faculty/Department
Faculty of Applied Economics
Publication type
article
Publication
Subject
Economics
Source (journal)
Annals of Management Science
Volume/pages
3(2014) :1 , p. 1-28
ISSN
2161-5012
vabb
c:vabb:381436
Carrier
E
Target language
English (eng)
Affiliation
University of Antwerp
Abstract
The aim of this study is to do a critical analysis, on the basis of different objectives, the banks registered in Lithuania during the recession years 2008-2009. As these banks work in the same macro-economic environment, the objectives are chosen on the basis of the CAMEL classification (C Capital adequacy, A Asset quality, M Management quality, E Earnings, L Liquidity). Traditional Cost-Benefit Analysis is not suitable enough for this. Indeed Cost-Benefit analysis translates all direct and indirect costs and other objectives (benefits) into money terms. On the contrary, Multi-Objective Optimization takes care of the different objectives, with objectives keeping their own units. Different methods exist for the application of Multi-Objective Optimization. In our research, we tested these methods for their robustness. MOORA (Multi-Objective Optimization by Ratio analysis) and MULTIMOORA (MOORA plus a Full Multiplicative Form), showed positive results on these tests. Therefore MULTIMOORA was chosen for the ranking of the Lithuanian Banks during the recession years 2008-2009. Keywords: Multi-objective optimization, Lithuanian banks, bank objectives, robustness, ratio system, Reference point method, Full multiplicative form.
Handle