Development of Methodology of Assessment of a Commercial Bank Efficiency

Master’s Thesis entitled “Development of Methodology of Assessment of a Commercial Bank Efficiency” aims to introduce the approach to relative efficiency measurement of banks that focuses on their ability to be an effective financial intermediary. In order to achieve the articulated objective we attempt to address quite a number of interesting and challenging tasks. Thus, the paper contains the survey of the evaluation procedures of the efficiency. The latter allows formulating the basic theoretical propositions of the suggested approach, which involves the application of data envelopment analysis. We modify the set of inputs and outputs in order to assess the aforementioned aspect of a bank’s activity. The application of the method allows rating the banks in accordance with their efficiency scores. Then we use the results received in the assessment of the relationship between bank’s efficiency and the set of variables that describe its activity. We think that the obtained information might be useful for different participants of the financial market.