Integration of Genetic Algorithm and Neural Network for Financial Early Warning System: An Example of Taiwanese Banking Industry

Genetic algorithm and neural network (GNN) are integrated to build a financial early warning system. An example of Taiwanese banking industry is discussed to test the hit ratio of each system. The performance is compared with other four early warning systems, namely, case-based reasoning, backpropagation neural network, logistic regression analysis, and quadratic discriminant analysis. The result indicates that the GNN proposed in this research is a little superior to the other two soft computing early warning systems. And the GNN outperforms the statistical early warning systems at least 13%.

• Type: Conference
• Year: 2006
• Where: ICICIC
• Authors: Jih-Chang Hsieh, Pei-Chann Chang, Shih-Hsin Chen
• Keywords: Applied Computing, Early Warning Systems, Financial Early Warning, ICICIC 2006, Neural Network