• Corpus ID: 246680002

Managers versus Machines: Do Algorithms Replicate Human Intuition in Credit Ratings?

  title={Managers versus Machines: Do Algorithms Replicate Human Intuition in Credit Ratings?},
  author={Matthew Harding and Gabriel F. R. Vasconcelos},
We use machine learning techniques to investigate whether it is possible to replicate the behavior of bank managers who assess the risk of commercial loans made by a large commercial US bank. Even though a typical bank already relies on an algorithmic scorecard process to evaluate risk, bank managers are given significant latitude in adjusting the risk score in order to account for other holistic factors based on their intuition and experience. We show that it is possible to find machine… 

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