Bankruptcy scenario query: B-SQ

Abstract

There has been increasing interest in risk scoring and bank- ruptcy prediction in recent years. Most of the current proposals analyse a set of parameters to classify companies as either active or def ault. What banks really need, however, is to be able to predict the probabil- ity of bankruptcy occurring in the future. Current approaches do not enable a deeper analysis to estimate the direction of a company as the parameters under study evolve. This article proposes a system for the Bankruptcy Scenario Query (B-SQ) which is based on association rules to allow users to conduct “What if...?” queries, and obtain as a response what usually happens under similar scenarios with the corresponding probability of it occurring.