Financial statement revisions can predict bank instability – research

Central Bank of Brazil researchers looked at 7.4 million financial items from 1,812 banks

Central Bank of Brazil
Central Bank of Brazil

Researchers from the Central Bank of Brazil have used machine learning to comb through pre-publication revisions to banks’ financial statements to detect financial risk.

“Pre-publication revisions contain significant private information about future bank risk,” the researchers write. “Banks that revise their financial statements more frequently tend to exhibit higher risk levels in the future.”

Speedy and efficient financial statement submissions are associated with safer banks, Andre Guettler

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