The Credit Risk Assessment Method Based on Evidence Reasoning

To avoid the credit risk, there are many methods to assess the credit of debtor, the assessment of different methods may be inconsistent, the paper introduces main credit assessment methods at first, and then puts forward a method to synthesize credit assessment of different methods, for getting more credible credit assessment, Dempster-Shafer combining evidence theory is introduced to fuse the conclusions of different methods. The thesis expands how to apply the D-S theory with an example, there are three assessments from expert method, financial ratio method and RAROC (Risk-adjusted return on capital), with the introduction of D-S theory, the disagreement is eliminated, and the credible final decision is reached.