Neural and wavelet network models for financial distress classification

This work analyzes the use of linear discriminant models, multi-layer perceptron neural networks and wavelet networks for corporate financial distress prediction. Although simple and easy to interpret, linear models require statistical assumptions that may be unrealistic. Neural networks are able to discriminate patterns that are not linearly separable, but the large number of parameters involved in a neural model often causes generalization problems. Wavelet networks are classification models that implement nonlinear discriminant surfaces as the superposition of dilated and translated versions of a single "mother wavelet" function. In this paper, an algorithm is proposed to select dilation and translation parameters that yield a wavelet network classifier with good parsimony characteristics. The models are compared in a case study involving failed and continuing British firms in the period 1997-2000. Problems associated with over-parameterized neural networks are illustrated and the Optimal Brain Damage pruning technique is employed to obtain a parsimonious neural model. The results, supported by a re-sampling study, show that both neural and wavelet networks may be a valid alternative to classical linear discriminant models.

Kernel classifier construction using orthogonal forward selection and boosting with Fisher ratio class separability measure

A greedy technique is proposed to construct parsimonious kernel classifiers using the orthogonal forward selection method and boosting based on Fisher ratio for class separability measure. Unlike most kernel classification methods, which restrict kernel means to the training input data and use a fixed common variance for all the kernel terms, the proposed technique can tune both the mean vector and diagonal covariance matrix of individual kernel by incrementally maximizing Fisher ratio for class separability measure. An efficient weighted optimization method is developed based on boosting to append kernels one by one in an orthogonal forward selection procedure. Experimental results obtained using this construction technique demonstrate that it offers a viable alternative to the existing state-of-the-art kernel modeling methods for constructing sparse Gaussian radial basis function network classifiers. that generalize well.

A fast identification algorithm for Box-Cox transformation based radial basis function neural network

In this letter, a Box-Cox transformation-based radial basis function (RBF) neural network is introduced using the RBF neural network to represent the transformed system output. Initially a fixed and moderate sized RBF model base is derived based on a rank revealing orthogonal matrix triangularization (QR decomposition). Then a new fast identification algorithm is introduced using Gauss-Newton algorithm to derive the required Box-Cox transformation, based on a maximum likelihood estimator. The main contribution of this letter is to explore the special structure of the proposed RBF neural network for computational efficiency by utilizing the inverse of matrix block decomposition lemma. Finally, the Box-Cox transformation-based RBF neural network, with good generalization and sparsity, is identified based on the derived optimal Box-Cox transformation and a D-optimality-based orthogonal forward regression algorithm. The proposed algorithm and its efficacy are demonstrated with an illustrative example in comparison with support vector machine regression.

A new RBF neural network with boundary value constraints

We present a novel topology of the radial basis function (RBF) neural network, referred to as the boundary value constraints (BVC)-RBF, which is able to automatically satisfy a set of BVC. Unlike most existing neural networks whereby the model is identified via learning from observational data only, the proposed BVC-RBF offers a generic framework by taking into account both the deterministic prior knowledge and the stochastic data in an intelligent manner. Like a conventional RBF, the proposed BVC-RBF has a linear-in-the-parameter structure, such that it is advantageous that many of the existing algorithms for linear-in-the-parameters models are directly applicable. The BVC satisfaction properties of the proposed BVC-RBF are discussed. Finally, numerical examples based on the combined D-optimality-based orthogonal least squares algorithm are utilized to illustrate the performance of the proposed BVC-RBF for completeness.

Neural network feature maps for Chinese phonemes

It has been shown through a number of experiments that neural networks can be used for a phonetic typewriter. Algorithms can be looked on as producing self-organizing feature maps which correspond to phonemes. In the Chinese language the utterance of a Chinese character consists of a very simple string of Chinese phonemes. With this as a starting point, a neural network feature map for Chinese phonemes can be built up. In this paper, feature map structures for Chinese phonemes are discussed and tested. This research on a Chinese phonetic feature map is important both for Chinese speech recognition and for building a Chinese phonetic typewriter.

Stable receding horizon control based on recurrent networks

The last decade has seen the re-emergence of artificial neural networks as an alternative to traditional modelling techniques for the control of nonlinear systems. Numerous control schemes have been proposed and have been shown to work in simulations. However, very few analyses have been made of the working of these networks. The authors show that a receding horizon control strategy based on a class of recurrent networks can stabilise nonlinear systems.

Weightless neural nets for face recognition: a comparison

This paper considers the application of weightless neural networks (WNNs) to the problem of face recognition and compares the results with those provided using a more complicated multiple neural network approach. WNNs have significant advantages over the more common forms of neural networks, in particular in term of speed of operation and learning. A major difficulty when applying neural networks to face recognition problems is the high degree of variability in expression, pose and facial details: the generalisation properties of a WNN can be crucial. In the light of this problem a software simulator of a WNN has been built and the results of some initial tests are presented and compared with other techniques

Neural network control of a simple mobile robot

In recent years researchers in the Department of Cybernetics have been developing simple mobile robots capable of exploring their environment on the basis of the information obtained from a few simple sensors. These robots are used as the test bed for exploring various behaviours of single and multiple organisms: the work is inspired by considerations of natural systems. In this paper we concentrate on that part of the work which involves neural networks and related techniques. These neural networks are used both to process the sensor information and to develop the strategy used to control the robot. Here the robots, their sensors, and the neural networks used and all described. 1.

Modeling of complex-valued Wiener systems using B-spline neural network

In this brief, a new complex-valued B-spline neural network is introduced in order to model the complex-valued Wiener system using observational input/output data. The complex-valued nonlinear static function in the Wiener system is represented using the tensor product from two univariate B-spline neural networks, using the real and imaginary parts of the system input. Following the use of a simple least squares parameter initialization scheme, the Gauss-Newton algorithm is applied for the parameter estimation, which incorporates the De Boor algorithm, including both the B-spline curve and the first-order derivatives recursion. Numerical examples, including a nonlinear high-power amplifier model in communication systems, are used to demonstrate the efficacy of the proposed approaches.

B-spline neural network based digital baseband predistorter solution using the inverse of De Boor algorithm

In this paper a new nonlinear digital baseband predistorter design is introduced based on direct learning, together with a new Wiener system modeling approach for the high power amplifiers (HPA) based on the B-spline neural network. The contribution is twofold. Firstly, by assuming that the nonlinearity in the HPA is mainly dependent on the input signal amplitude the complex valued nonlinear static function is represented by two real valued B-spline neural networks, one for the amplitude distortion and another for the phase shift. The Gauss-Newton algorithm is applied for the parameter estimation, in which the De Boor recursion is employed to calculate both the B-spline curve and the first order derivatives. Secondly, we derive the predistorter algorithm calculating the inverse of the complex valued nonlinear static function according to B-spline neural network based Wiener models. The inverse of the amplitude and phase shift distortion are then computed and compensated using the identified phase shift model. Numerical examples have been employed to demonstrate the efficacy of the proposed approaches.

The plastic self organising map

A novel extension to Kohonen's self-organising map, called the plastic self organising map (PSOM), is presented. PSOM is unlike any other network because it only has one phase of operation. The PSOM does not go through a training cycle before testing, like the SOM does and its variants. Each pattern is thus treated identically for all time. The algorithm uses a graph structure to represent data and can add or remove neurons to learn dynamic nonstationary pattern sets. The network is tested on a real world radar application and an artificial nonstationary problem.

Dealing with complexity: an overview of the neural network approach

The problem of complexity is particularly relevant to the field of control engineering, since many engineering problems are inherently complex. The inherent complexity is such that straightforward computational problem solutions often produce very poor results. Although parallel processing can alleviate the problem to some extent, it is artificial neural networks (in various forms) which have recently proved particularly effective, even in dealing with the causes of the problem itself. This paper presents an overview of the current neural network research being undertaken. Such research aims to solve the complex problems found in many areas of science and engineering today.

Multi-layer radial basis function networks: an extension to the radial basis function

This paper presents the initial research carried out into a new neural network called the multilayer radial basis function network (MRBF). The network extends the radial basis function (RBF) in a similar way to that in which the multilayer perceptron extends the perceptron. It is hoped that by connecting RBFs together in a layered fashion, an equivalent increase in ability can be gained, as is gained from using MLPs instead of single perceptrons. The results of a practical comparison between individual RBFs and MRBF's are also given.