An early warning system for loan risk assessment using artificial neural networks

The purpose of this paper is to examine the application of artificial neura l networks (ANN) to an early warning system for commercial bank loan risk. The aspects of knowledge acquisition, knowledge representation and knowledg e-based reasoning process in the early warning system are discussed in the paper. The paper demonstrates how to design a decision tool based on the BP model and provides examples. The results show that this method offers a go od tool for early warning. (C) 2001 Elsevier Science B.V. All rights reserv ed.