What is it about?
This paper presents a novel method to predict bankruptcy, using a Genetic Programming (GP) based approach called Evolving Decision Rules (EDR). We use a financial institutions' data set obtained from the US Federal Deposit Insurance Corporation (FDIC). We construct a set of comprehensible decision rules that allow to identify cases of bankruptcy.
Featured Image
Why is it important?
The Evolving Decision Rules method has two relevant features: i) it generated interpretable rules in terms of simple financial rations, which allows comprehensive analysis of the decision-making process; ii) it includes cutting edge techniques to handle highly unbalanced samples.
Perspectives
To our knowledge this is the first computational technique in bankruptcy detection able to give useful insights of the method's predictive structure.
Dr Biliana Alexandrova-Kabadjova
Banco de Mexico
Read the Original
This page is a summary of: Understanding Bank Failure: A Close Examination of Rules Created by Genetic Programming, September 2010, Institute of Electrical & Electronics Engineers (IEEE),
DOI: 10.1109/cerma.2010.14.
You can read the full text:
Contributors
The following have contributed to this page
