Text mining reveals differences in PRA approach
Researchers compare Prudential Regulation Authority’s communications to its predecessor
Researchers at the Bank of England have “mined” the text of communication by the Prudential Regulation Authority, finding its approach has changed relative to its predecessor.
David Bholat, James Brookes, Chris Cai, Katy Grundy and Jakob Lund use a form of supervised machine learning known as ‘random forests’ to analyse confidential PRA communications to financial firms. The authors say their approach allows them to study “deep linguistic structure”.
Their results, published today (October 27)
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