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Using Self Organizing Maps for Banking Oversight: The Case of Spanish Savings Banks

Using Self Organizing Maps for Banking Oversight: The Case of Spanish Savings Banks

Felix Lopez-Iturriaga, Iván Pastor-Sanz
Copyright: © 2017 |Pages: 27
ISBN13: 9781522507888|ISBN10: 1522507884|EISBN13: 9781522507895
DOI: 10.4018/978-1-5225-0788-8.ch049
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MLA

Lopez-Iturriaga, Felix, and Iván Pastor-Sanz. "Using Self Organizing Maps for Banking Oversight: The Case of Spanish Savings Banks." Nature-Inspired Computing: Concepts, Methodologies, Tools, and Applications, edited by Information Resources Management Association, IGI Global, 2017, pp. 1306-1332. https://doi.org/10.4018/978-1-5225-0788-8.ch049

APA

Lopez-Iturriaga, F. & Pastor-Sanz, I. (2017). Using Self Organizing Maps for Banking Oversight: The Case of Spanish Savings Banks. In I. Management Association (Ed.), Nature-Inspired Computing: Concepts, Methodologies, Tools, and Applications (pp. 1306-1332). IGI Global. https://doi.org/10.4018/978-1-5225-0788-8.ch049

Chicago

Lopez-Iturriaga, Felix, and Iván Pastor-Sanz. "Using Self Organizing Maps for Banking Oversight: The Case of Spanish Savings Banks." In Nature-Inspired Computing: Concepts, Methodologies, Tools, and Applications, edited by Information Resources Management Association, 1306-1332. Hershey, PA: IGI Global, 2017. https://doi.org/10.4018/978-1-5225-0788-8.ch049

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Abstract

This chapter combines two methods based on neural networks (trait recognition and self-organizing maps) to develop a model of bankruptcy prediction. The authors apply the method to the Spanish savings banks, most of them rescued by the Government between 2008 and 2013 in a costly massive process. First, the authors detect the combinations of variables (performance, asset structure, and capitalization) that best describe the profile of the rescued savings banks. Then, the authors use these combinations on a yearly basis to generate bi-dimensional maps in which banks are placed according to their risk and similarities. This method provides a visual tool that can improve the oversight of policy makers on the whole financial system and enable time pertinent answers to some threatens to the country financial stability. The maps are useful means to detect and understand how the financial threats emerge over time too.

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