Potential Attitudes Solving the Problems of Banking Stability

The aim of this paper is to introduce the evaluation of the Czech banking sector and banking stability based on discriminant analysis and cluster. The model is devised on the basis of financial indicators analysis of selected banking institutions based on the Czech Republic in the period from 1995 until 2005. The banks were divided into two groups ñ the group of operating banks and the group of bankrupted banks. This division was done according to the real development of the Czech banking sector based on data provided by the Czech National Bank. All banks providing services in the Czech Republic in the period of 1995-2005 were analysed in the model except for building societies (due to their different activities compared to commercial banks) and foreign banksí subsidiaries (strongly influenced by their foreign owners). Data for calculation of financial indicators were taken from bankís financial statements.