Detection of Company Failure and Global Risk Forecasting

Work on detecting and monitoring company risk has greatly increased over the last ten years both in credit reference agencies or associations of credit managers and in banks or public bodies which monitor the national and international economic situation. The Banque de France’s work on risk is part of its credit supervision and banking system refinancing responsibilities.Since 1982, the Banque de France’s research into operational credit scoring has intensified with the use of increasingly vast and reliable databases. The aim is to describe risk in statistical terms and create medium-term forecasts for firms in France. The tools created provide both an individual risk diagnosis for each firm and an overview of company risk as a whole. This paper gives a progress report on the work carried out and some indications of the prospects for the future.