We study how government’s debt-rating considerations affect privatization policy, due to their differential effect on the government’s valuation of the monetary and social-benefit aspects of public enterprises. "Credit-market discipline" presses the government to put more weight on the monetary aspect, as this increases its creditors’ confidence in its ability to repay debt. Informational probl...

This study proposes an information asymmetry hypothesis to examine why bank credit ratings vary among countries even when bank financial ratios remain constant. Countries are divided among those with low and high information asymmetry. The former include high-income countries, those in North America and West Europe regions, and those with strong institutional environment quality, whereas the la...

In this paper, we propose a new machine learning approach based on AFS (Axiomatic Fuzzy Sets) fuzzy logic, in attempt to provide a better model with interpretability. First, we will concisely present the AFS theory. Second, we will propose new membership functions for fuzzy sets and their logic operations. Third, we will design a new machine learning algorithm based on the new membership functi...

At present, it is simple to the electronic commerce credit scoring model, as a brush credit phenomenon in E-commerce has emerged. This phenomenon affects the judgment of consumers and hinders the rapid development of E-commerce. In this paper, that E-commerce credit evaluation model that uses a Gaussian density function is put forward by density test and the analysis for the anomalies of E-comm...

Understanding the structure of interactions between corporate firms is critical to identify risk concentration and the possible pathways of propagation of financial distress. In this paper we consider the interaction due to payments and, by investigating a large proprietary dataset of Italian firms, we characterize the topological properties of the payment network. We then focus on the relation...

It is well known that credit rating transitions exhibit a serial correlation, also known as a rating drift. This is clearly confirmed by this analysis, which also reveals that the credit rating migration process is mainly influenced by three completely different non-observable hidden risk situations, providing an individual environment for each successive rating. This finding violates the commo...

A small enterprise’s credit rating is employed to measure its probability of defaulting on a debt, but, for small enterprises, financial data are insufficient or even unreliable. Thus, building a multi criteria credit rating model based on the qualitative and quantitative criteria is of importance to finance small enterprises’ activities. Till now, there has not been a multicriteria credit risk...

One of the most significant developments in international credit markets in recent years has been the trade in Collateralized Debt Obligations (CDO), which has enabled financial institutions to repackage the credit risk of an asset portfolio into tranches to be transferred to investors. The present paper evaluates the credit risk of such a portfolio and the related tranches by applying two prom...

Credit rating assessment is a complicated process in which many parameters describing a company are taken into consideration and a grade is assigned, which represents the reliability of a potential client. Such assessment is expensive, because domain experts have to be employed to perform the rating. One way of lowering the costs of performing the rating is to use an automated rating procedure....