A framework of evaluation of commercial banks

The current crisis increases the threat of failure of commercial banks, which is being indicated by statistically an increasing number of already failed commercial banks. It is shown that deposit insurance schemes do not cover the full risk of losing deposits at such banks, thus making evaluation of stability and soundness of commercial banks an important task. Since banking business has many different aspects, evaluation of a commercial bank must simultaneously comprise many areas. This paper proposes the framework of such an evaluation and provides results for Lithuanian commercial banks