Development of a methodology of evaluation of financial stability of commercial banks

The field of evaluation of financial stability of commercial banks, which emanates from persistent existence of financial crisis, induces interest of researchers for over a century. The span of prevailing methodologies stretches from over-simplified risk-return approaches to ones comprising large number of economic variables on the micro- and/or macro-economic level. Methodologies of rating agencies and current methodologies reviewed and applied by the ECB are not intended for reducing information asymmetry in the market of commercial banks. In the paper it is shown that the Lithuanian financial system is bankbased with deposits of households being its primary sources, and its stability is primarily depending on behavior of depositors. A methodology of evaluation of commercial banks with features of decreasing information asymmetry in the market of commercial banks is being developed by comparing different MCDA methods

Robustness in regional development studies. The case of Lithuania

The definition of robustness in econometrics, the error term in a linear equation, was not only broadened, but, in addition, moved to the meaning of common language: from a cardinal to a qualitative one: the most robust one, more robust than…, as robust as……, robust, weak robust, less robust than…, not robust, etc. Both interpretations are tested by an application on the Robustness in Regional Development, namely of the Lithuanian Regions. The computation of Regional Income, being an exponent of the welfare economy, is not sufficient for the measurement of the well‐being of the regional population. The well‐being economy goes farther. In the well‐being economy, each individual would have to feel good concerning material wealth, health, education, all kind of security and concerning the environment. In other words, multiple objectives have to be fulfilled. Moreover, these different multiple objectives are expressed in different units. Weights are most of the time used to equalize these different units. However, introduction of weights means also introduction of subjectivity. In order to avoid this dilemma, the internal mechanical solution of a ratio system, producing dimensionless numbers, is preferred. In addition, this outcome creates the opportunity to use also a non‐subjective reference point theory. The choice of the objectives is also non‐subjective if all stakeholders are involved, or if all possible objectives are represented. This theory, which is called MOORA (Multi‐Objective Optimization by Ratio Analysis), is applied to the different regions of Lithuania. A redistribution of income has to take place from the well‐being Lithuanian regions to the poorer regions, but under limiting conditions and for well defined and eventually controlled projects. First Publish Online: 09 Jun 201

European Union member states preparing for Europe 2020. An application of the MULTIMOORA method

It is the intention of the European Union to create a growing and sustainable European economy by 2020, a much more moderate target than the 2010 target of becoming the most competitive and dynamic knowledge-based economy in the world. This intention has to be supported by an adequate Optimization and Decision Support System. Therefore, MULTIMOORA is proposed. MULTIMOORA is a quantitative method, which compares multiple and optimum objectives, expressed in different units, as much as possible on a non-subjective basis. In opposition to similar methods MULTIMOORA does not need normalization, being based on dimensionless measures. Importance of an objective can eventually be given by the stakeholders concerned. MULTIMOORA is composed of three approaches: Ratio System, Reference Point and Multiplicative Form Methods, all of the same importance and each controlling each other. Twenty two objectives, 10 originating from statistics and 12 from statistics and forecasts, important for the future, characterize the 27 EU-Countries economies as a preparation for 2020. Which of these countries are the best prepared for 2020? A Dominance Theory, summarizing the three obtained ordinal numbers per country, ranks the 27 countries for that purpose

Lithuanian case study of masonry buildings from the Soviet period

This paper presents the process of effective selection of building elements for renovation important for energy saving in buildings. A large part of energy is lost in non-effective buildings. Therefore, in renovation of buildings, it is important to select effective structural improvements. Building insulation could not only save energy but also time, money and materials, which means that different objectives expressed in different units have to be fulfilled. Although different methods exist for the application of Multi Objective Optimisation, MULTIMOORA, which is composed of three sub-methods – Ratio System, Reference Point Method that uses ratios from the ratio system, and the Full Multiplicative Form – was preferred. Consequently, different solutions for building envelope renovation were ranked by MULTIMOORA as applied for masonry buildings from the Soviet period

The construction sector in twenty European countries during the recession 2008–2009 – country ranking by MULTIMOORA

The recession 2008-2009 which influenced the World economy has set new challenges for the development of the European construction sector. In the years 2008–2009 a great number of countries faced serious production and employment breakdowns. The purpose of this paper is to analyze the construction sector from a macroeconomic point of view by comparing construction market variations appeared during the crisis in twenty European countries. Therefore statistical indicators of the construction sector were used and a multiobjective evaluation method under the name of MULTIMOORA was employed. However these traditional indicators of the construction sector deliver an incomplete definition of real situations within the sector as during the recession plenty of constructed buildings remained unsold. Therefore the authors of this article propose a rather complex comparison of construction indicators for different European countries. The case study provides the analysis and calculations performed with the help of the MULTIMOORA method. This method enables the evaluation of European countries in accordance with the investigated objectives and ranges them into different groups according to the objectives set for the construction sector

Multi‐objective decision‐making for road design

Multi‐objective analysis is a popular tool to solve many economic, managerial and construction problems. The objective of this research is to develop and implement a methodology for multi‐objective optimization of multi‐alternative decisions in road construction. After a rough overview of the articles dealing with the multi‐objective decision and assessment of road design alternatives described by discrete values, Multi‐Objective Optimization on the basis of the Ratio Analysis (MOORA) method was selected. This method focuses on a matrix of alternative responses on the objectives. A case study demonstrates the concept of multi‐objective optimization of road design alternatives and the best road design alternative is determined. First published online: 27 Oct 201

Multimoora optimization used to decide on a bank loan to buy property

Different multiple objectives are expressed in different units, which makes optimization difficult. Therefore the internal mechanical solution of a Ratio System, producing dimensionless numbers, is preferred to Weights which are most of the time used to compare the different units. In addition, the ratio system creates the opportunity to use a second approach: a non-subjective Reference Point Theory. The two approaches form a control on each other. The choice of the objectives is even more non-subjective if the opinion of all stakeholders interested in the issue is involved by the use of the Ameliorated Nominal Group and Delphi Techniques. The overall theory is called MOORA (Multi-Objective Optimization by Ratio Analysis). The results are still more convincing if a Full Multiplicative Form is added to MOORA under the name of MULTIMOORA. At that moment the control by three different approaches forms a guaranty for a solution being as non-subjective as possible. MULTIMOORA is used to decide upon a bank loan to buy property

Robustness of MULTIMOORA: a method for multi-objective optimization

Daugiatikslė optimizacija iškelia skirtingus tikslus, kurie išsaugo tikslams būdingus mato vienetus. Santykių Sistemos (Ratio System) vidiniai sprendiniai suteikia galimybę naudoti bedimensius dydžius. Taip pat, Santykių Sistema (Ratio System) leidžia taikyti Atskaitos taško (Reference Point) metodiką. Sujungus abu metodus išvesta MOORA (daugiatikslis optimizavimas remiantis santykio analize) metodo teorija. Pasiekti dar tikslesnius rezultatus galima taikant pilnąją sandaugos formą (Full Multiplicative Form), kurią apjungia MULTIMOORA (MOORA plius pilnoji sandaugos forma) metodas. Išbandžius MULTIMOORA metodo stiprumą gaunami tikslūs rezultatai. Multi-Objective Optimization takes care of different objectives with the objectives keeping their own units. The internal mechanical solution of a Ratio System, producing dimensionless numbers, is preferred. The ratio system creates the opportunity to use a second approach: a Reference Point Theory, which uses the ratios of the ratio system. This overall theory is called MOORA (Multi-Objective Optimization by Ratio Analysis). The results are still more convincing if a Full Multiplicative Form is added forming MULTIMOORA. The control by three different approaches forms a guaranty for a solution being as non-subjective as possible. MULTIMOORA, tested after robustness, showed positive results

Project management by multimoora as an instrument for transition economies / Projektų vadyba su multimoora kaip priemonė pereinamojo laikotarpio ūkiams

The countries of Central and Eastern Europe moved from a previously centrally planned economy to a modern transition economy with strong market aspects. This paper proposes project management as an answer to this transition. Traditional Cost‐Benefit analysis does not respond to this purpose. Indeed Cost‐Benefit analysis is only interested in one specific project and not in a competition between projects. In addition all goals (objectives) have to be translated into money terms, leading sometimes to immoral consequences. On the contrary Multi‐Objective Optimization takes care of different objectives, whereas the objectives keep their own units. However different methods exist for the application of Multi‐Objective Optimization. The authors tested them after their robustness resulting in seven necessary conditions. MOORA (Multi‐Objective Optimization by Ratio analysis) and MULTIMOORA (MOORA plus Full Multiplicative Form), assisted by Ameliorated Nominal Group and Delphi Techniques, satisfy the seven conditions, although in a theoretical way. A simulation exercise illustrates the use of these methods, ideals to be strived for as much as possible. Santrauka Centrinės ir rytų Europos šalys perėjo iš anksčiau centralizuotai planuojamos ūkinės sistemos į šiuolaikinę pereinamąją ūkinę sistemą, kuriai būdingi ryškūs rinkos požymiai. Šiame straipsnyje siūloma projektų vadyba kaip atsakas į perėjimą. Įprastinė kainos ir naudos analizė tam tikslui yra netinkama. Be viso to, kainos ir naudos analizėje neatsižvelgiama į kiekvieną atskirai paimtą projektą bei į konkurenciją tarp tų projektų. Visi tikslai turi būti pakeisti piniginėmis vertėmis. Del to kartais kyla nepageidaujamų pasėkmių. Priešingai tam daugiatikslė optimizacija atsižvelgia į skirtingus tikslus, išsaugant tikslams būdingus mato vienetus. Yra daug įvairių daugiatikslės optimizacijos metodų. Autoriai patikrino jų stipriasias savybęs pagal septynias būtinasias sąlygas. MOORA (daugiatikslė optimizacija santykių dydžių analizės pagrindu) ir MULTIMOORA (MOORA plius pilnoji sandaugos forma), apimanti patobulintą normaliųjų grupių ir Delphi būdus, geriausiai atitinka septynias būtinąsiąs sąlygas taip pat ir teoriniu lygmeniu. Pavyzdžio modelis iliustruoja šiu metodu taikymą, idealai buvo pasiekti tiek, kiek galima. First published online: 21 Oct 2010 Reikšminiai žodžiai: projektu vadyba, kainos ir naudos analize, daugiatiksle optimizacija, stiprybes, patobulintas grupinis ir Delphi būdai, pilnoji multiplikatyvine form