CIB Bank

Some aspects of rating of debtors and bankruptcy forecasting by banks, commissioned by the CIB Bank

2006 (Éva Várhegyi, Éva Voszka)

The study aims to reveal the risks inherent in the relationship between banks and companies. The principle goal is to develop methods for the rating of debtors and for bankruptcy forecasting by banks, using an intelligent combination of quantitative and qualitative approaches. Furthermore, banking practices will be enriched with new angles by means of a detailed corporate case study. The novelty of the complex approach lies in applying the theory of the soft budget constraint and the soft loan to the system debtor rating. Another novelty is the elaboration of a bankruptcy forecasting algorithm that simultaneously builds on analytic methods based on numerical data and on expert experience.