THE BANKING STABILITY IN THE CZECH REPUBLIC BASED ON DISCRIMINANT AND CLUSTER ANALYSES

anking sector can have important effects on all economic units. Therefore stability of the banking sector is important for every economy. In the Czech Republic the banking sector has undergone profound changes after 1989. This study aims to develop a stability model for the banking sector in the Czech Republic using data for the period from1995 to 2005. According to the model developed in the study stability of banks is easily evaluated. In this study concerning 38 banks in the Czech Republic’s banking sector 17 banks are found to be at a satisfactory level according to the model.