Modern Approaches in Credit Risk Modeling: A Literature Review

Abstract In the financial industry, models are pervasive, and their quantity complexity continue to increase. Constant advancements made in econometric statistical theory, but a fast-developing body of rules regulations governing use needs modeling specialists remain vigilant adaptable. The tendency these be ambiguous necessitates that industry professionals institutions interpret them independently jointly. This leads what is referred as “industry standard,” or set procedures recognized among not necessarily those outside industry. Non-practitioners may view department “black box” for reasons. accurate evaluation credit risk forecasting bankruptcy crucial both economy society. recent years, more approaches algorithms have been advanced this purpose. At point, it highest concern investigate current assessment methods. paper, we review traditional cutting-edge intelligent methods distress, with focus on greatest advances academic literature, promising trend field. Lastly, paper will conclude an overview evolution methodologies conceptual frameworks management research, well possible future research directions.