Modelling credit rating by fuzzy adaptive network

Human judgment plays an important role in the rating of enterprise financial conditions. The recently developed fuzzy adaptive network (FAN), which can handle systems whose behaviour is influenced by human judgment, appears to be ideally suited for the modelling of this credit rating problem. In thi...

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Bibliographic Details
Published in:Mathematical and computer modelling 2007-03, Vol.45 (5), p.717-731
Main Authors: Jiao, Yue, Syau, Yu-Ru, Lee, E. Stanley
Format: Article
Language:English
Subjects:
Applications
Applied sciences
Artificial intelligence
Computer science
control theory
systems
Credit rating
Exact sciences and technology
Fuzzy adaptive network
Fuzzy logic
Fuzzy number
General logic
Insurance, economics, finance
Learning and adaptive systems
Linguistic representation
Logic and foundations
Mathematical logic, foundations, set theory
Mathematics
Operational research and scientific management
Operational research. Management science
Probability and statistics
Sciences and techniques of general use
Statistics
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Summary:Human judgment plays an important role in the rating of enterprise financial conditions. The recently developed fuzzy adaptive network (FAN), which can handle systems whose behaviour is influenced by human judgment, appears to be ideally suited for the modelling of this credit rating problem. In this paper, FAN is used to model the credit rating of small financial enterprises. To illustrate the approach, the data of the credit rating problem is first represented by the use of fuzzy numbers. Then, the FAN network based on inference rules is constructed. And finally, the network is trained or learned by using the fuzzy number training data. The main advantages of the proposed network are the ability for linguistic representation, linguistic aggregation and the learning ability of the neural network.
ISSN:0895-7177
1872-9479
DOI:10.1016/j.mcm.2005.11.016