AI-based ensemble learning model for financial leverage prediction and risk management in thebanking sector

What is it about?

This study helps banks make smarter financial decisions by using artificial intelligence (AI) to predict how much money they can safely borrow—also known as financial leverage. Predicting leverage is important because it affects how stable and risky a bank is. The researchers collected data from 15 Jordanian banks over 13 years and used it to train and test four AI models. These models can find patterns in the data that humans might miss. The study found that one model in particular—called Gradient Boosting Regressor (GBR)—gave the most accurate predictions. This means that banks and financial regulators can use this model to better understand risks, avoid financial problems, and make decisions based on data, not guesswork. This is one of the first studies to compare multiple AI models to predict leverage in the banking sector, especially in emerging markets like Jordan.

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