Graphical Data Representation in Bankruptcy Analysis

Graphical data representation is an important tool for model selection in bankruptcy analysis since the problem is highly non-linear and its numericalrepresentation is much less transparent. In classical rating models a convenientrepresentation of ratings in a closed form is possible reducing the need for graphical tools. In contrast to that non-linear non-parametric models achieving better accuracy often rely on visualisation. We demonstrate an application of visualisation techniques at different stages of corporate default analysis based on Support Vector Machines (SVM). These stages are the selection of variables (predictors), probability of default (PD) estimation and the representation of PDs for two and higher dimensional models with colour coding...br>