Assessing Machine Learning Techniques for Predicting Banking Crises in India
Bibliographic record
Abstract
The historical prevalence of banking crises and their profound impact on global economies underscores the imperative for policy makers to refine their crisis forecasting frameworks. Against this backdrop, the present study endeavors to predict potential banking crises in India by leveraging a spectrum of artificial intelligence and machine learning techniques (AI-ML). These techniques encompass logistic regression, random forest, naïve Bayes, gradient boosting, support vector machine, neural networks, K-nearest neighbors, and decision trees. Initially, a banking fragility index was constructed utilizing monthly banking data spanning 2002 to 2023, demarcating the periods of crisis and stability. Subsequently, an extensive array of early warning indicators (EWIs) encompassing asset prices, macroeconomic factors, external influences, and credit-related variables were employed to forecast crisis periods. Our findings reveal that AI-ML models exhibit reasonable accuracy in predicting banking crises. Moreover, advanced model performance metrics highlight neural networks and random forest models as particularly effective in crisis prediction, surpassing other methodologies. Notably, among the EWIs, variables related to credit, interest rates, and liquidity emerge as possessing relatively higher information value in discerning fragilities within the Indian banking system. Importantly, the methodological framework presented herein can be extrapolated for banking crisis prediction in other economies.
Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.
How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.003 | 0.011 |
| Meta-epidemiology (narrow) | 0.001 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.001 |
| Bibliometrics | 0.004 | 0.002 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.001 | 0.001 |
| Open science | 0.001 | 0.001 |
| Research integrity | 0.001 | 0.001 |
| Insufficient payload (model declined to judge) | 0.001 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".