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Parastatistic distribution of a total debt owed to a large number of creditors considered in relation to the duration of these debts. The process of debt calculation depends on the fractal dimension of economic system in which this process…
Smart contracts play a central role in blockchain systems by encoding financial and operational logic. Still, their susceptibility to subtle security flaws poses significant risks of financial loss and erosion of trust. LLMs create new…
The recent financial crisis of 2008 and the 2011 indebtedness of Greece highlight the importance of understanding the structure of the global financial network. In this paper we set out to analyze and characterize this network, as captured…
The problem of state reconstruction and estimation is considered for a class of switched dynamical systems whose subsystems are modeled using linear differential-algebraic equations (DAEs). Since this system class imposes time-varying…
Corporate credit rating is an analysis of credit risks within a corporation, which plays a vital role during the management of financial risk. Traditionally, the rating assessment process based on the historical profile of corporation is…
Data reconstruction attacks, which aim to recover the training dataset of a target model with limited access, have gained increasing attention in recent years. However, there is currently no consensus on a formal definition of data…
We present a multilayer network model for credit risk assessment. Our model accounts for multiple connections between borrowers (such as their geographic location and their economic activity) and allows for explicitly modelling the…
Credit scoring is a rapidly expanding analytical technique used by banks and other financial institutions. Academic studies on credit scoring provide a range of classification techniques used to differentiate between good and bad borrowers.…
This paper studies how international investors' concerns about model misspecification affect sovereign bond spreads. We develop a general equilibrium model of sovereign debt with endogenous default wherein investors fear that the…
This article introduces both a new algorithm for reconstructing epsilon-machines from data, as well as the decisional states. These are defined as the internal states of a system that lead to the same decision, based on a user-provided…
Solomon and Golo [1] have recently proposed an autocatalytic (self-reinforcing) feedback model which couples a macroscopic system parameter (the interest rate), a microscopic parameter that measures the distribution of the states of the…
Using standard financial ratios as variables in statistical analyses has been related to several serious problems, such as extreme outliers, asymmetry, non-normality, and non-linearity. The compositional-data methodology has been…
Bankruptcy prediction is an important research area that heavily relies on data science. It aims to help investors, managers, and regulators better understand the operational status of corporations and predict potential financial risks in…
In this paper, we explore how large language models (LLMs) approach financial decision-making by systematically comparing their responses to those of human participants across the globe. We posed a set of commonly used financial…
A problem of optimal debt management is modeled as a noncooperative game between a borrower and a pool of lenders, in infinite time horizon with exponential discount. The yearly income of the borrower is governed by a stochastic process.…
LLM-based agent judges are an emerging approach to evaluating conversational AI, yet a fundamental uncertainty remains: can we trust their assessments, and if so, how many are needed? Through 960 sessions with two model pairs across 15…
In a dynamic economy, we characterize the fiscal policy of the government when it levies distortionary taxes and issues defaultable bonds to finance its stochastic expenditure. Default may occur in equilibrium as it prevents the government…
We describe the bailout of banks by governments as a Markov Decision Process (MDP) where the actions are equity investments. The underlying dynamics is derived from the network of financial institutions linked by mutual exposures, and the…
Credit Scores are ubiquitous and instrumental for loan providers and regulators. In this paper we showcase how micro-loan credit system can be developed in real setting. We show what challenges arise and discuss solutions. Particularly, we…
Large language models are increasingly influencing human moral decisions, yet current approaches focus primarily on evaluating rather than actively steering their moral decisions. We formulate this as an out-of-distribution moral alignment…