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9 papers in the last four weeks, level with the four weeks before. 0.1% of all new papers.

Jul 13Week of Sep 28

Latest papers 239

Oct 7, 2026cs.LG

HAN-Mamba: Hierarchical Selective State Space Networks for Multi-Scale Financial Volatility Forecasting

Short-horizon realized volatility forecasting requires the integration of market information that evolves at incompatible temporal resolutions, from second-level order book dynamics to weekly regime drift. Our conference work introduced HAN-T, a hierarchical architecture in which scale-specific Transformer encoders process short, mid, and long-horizon streams and a learned attention fuser weighs their contributions. This article replaces the quadratic attention encoders with selective state space (Mamba) encoders while retaining attention only in the fuser, where the input is a three-token set rather than a long sequence. The resulting hybrid, HAN-Mamba, summarizes each stream through a recurrent state whose input-dependent gating matches two structural properties of volatility: persistent but decaying memory and abrupt regime shifts. On the Optiver Realized Volatility Prediction benchmark under time-aware five-fold cross-validation, HAN-Mamba improves mean RMSPE over HAN-T (0.1942 vs. 0.1965) with 33% fewer parameters. Its linear-time encoders further allow the high-frequency context to be extended from 60 to 240 buckets, reducing error to 0.1927 where the attention variant saturates, and support constant-time streaming updates at inference. Ablations attribute the gains to the encoder swap, confirm that the hierarchical prior transfers across sequence-model families, and show that the permutation-invariant attention fuser remains the correct mechanism for cross-scale integration.

Mihai Bogdan Deaconu, Ioan Daniel Pop

Faculty of Mathematics and Computer Science, Babeş-Bolyai University, Cluj-Napoca, Romania

Time Series Forecasting Financial Time Series Multiscale Time-Series Modeling Finance Selective SSMs

Oct 5, 2026cs.LG

Adversarial Training for Deep Hedging in Nonstationary Markets

Deep hedging learns trading policies from historical or simulated market trajectories, yet under nonstationarity these training paths may not represent future market conditions. We propose WRAP (Wasserstein-Reweighting Adversarial Perturbation), a drift-aware adversarial training framework derived from a two-budget distributionally robust optimization (DRO) formulation. The formulation is anchored to a weighted empirical reference distribution whose fixed baseline weights are chosen to balance sampling uncertainty against temporal drift. Around this reference distribution, the ambiguity set addresses two complementary forms of distributional misspecification by allowing an adversary to reweight the observed trajectories subject to a

φ

-divergence constraint and perturb their paths subject to an optimal-transport (OT) constraint. We derive a joint first-order expansion in which the leading-order increase over the nominal expected loss decomposes into a reweighting contribution determined by the dispersion of hedging losses across trajectories and a transport contribution determined by the sensitivity of the loss to path perturbations. This expansion yields an explicit finite-dimensional adversarial attack that replaces the distributional inner supremum with a tractable first-order approximation. Across stationary and nonstationary Heston dynamics and a generalized affine diffusion (GAD), the experiments show complementary benefits from reweighting and transport, with joint adversarial training providing the largest gains under nonstationarity.

Philipp J. Schneider, Lukas Looser, Antoine Garin +2

Risk Analytics and Optimization Chair, EPFL, Lausanne, Switzerland · University of Waterloo, Waterloo, Canada

Adversarial Training Quantitative Finance Wasserstein Distributionally Robust Optimization Finance Algorithmic Trading

Oct 1, 2026cs.AI

DAYJOB: A Benchmark for Long-Horizon Professional Work

Professional work often starts with a brief request that leaves the professional to work out what is needed, which documents matter, and whether the request's premise holds. We introduce DAYJOB, a benchmark of 130 tasks built by professionals in healthcare (50) and finance (80). The tasks are estimated to take a professional 13.6 hours on average in healthcare and 16.6 in finance. Each task is a containerized Harbor environment with an expert rubric of binary criteria (median 47.5 and 57.5 per task) that an agentic judge applies to the delivered files, and an attempt passes only if it meets every criterion. Across 30 model configurations from 13 developers, the strongest, Claude Opus 5.5, passes 24.7% of healthcare and 23.9% of finance attempts, and the median configuration passes 0.6% and 2.5%. In case studies, agents accept premises that the record contradicts and carry wrong inputs through otherwise consistent analyses. We release all healthcare tasks, 50 of the 80 finance tasks, the evaluation harness, and the leaderboard.

Stephanie Finley, Liudas Panavas, Thomas Mikkelson +12

Surge AI

LLM Agent Evaluation Long-Horizon Agent Tasks Finance Agent Benchmarks

Sep 29, 2026q-fin.TR

Say, Echo, Do: Strategic Narratives and Revealed Positioning in Financial Markets

Machine-learning signals built from financial text treat what institutions say, and what the media repeat, as evidence about value. But whoever shapes a narrative may be trading against it. We study markets with three observable voices: institutional statements (Say), media repetition (Echo) and revealed positioning (Do). We ask when words should be followed and when they should be faded. In a linear-quadratic model of an informed institution that speaks and trades before a partly credulous crowd, talking an asset down while buying it is optimal exactly when

\varphi^2<2λk<\varphi

. A distribution-free identity then shows that when the observable Say-Do covariance is negative, words carry negative predictive content and should be faded. For measurement, we derive (i) an exact factorised posterior over which articles are echoes, combining arrival times with embedding similarity; (ii) a return-aligned contrastive objective that attains its bound exactly when squared embedding distances are an increasing affine function of squared outcome distances, with the tightest loss-based certificate of which neighbour rankings survive imperfect training; and (iii) a path-signature statistic for who moved first. In a controlled market with known ground truth, echo sentiment predicts returns with a significantly negative sign in all 29 simulated markets, the rolling Say-Do correlation flags false-alarm events with an AUC of 0.90, and return-aligned embeddings organise headlines by consequence rather than topic. We also report where the tools fail.

Ali Atiah Alzahrani

Riyadh, Saudi Arabia

Quantitative Finance Financial Forecasting Financial Sentiment Analysis Finance

Sep 23, 2026econ.GN

Sovereign Grassroots Currencies: A CBDC Architecture for Credit and Monetary Policy (Full Version)

A Central Bank Digital Currency (CBDC) is central-bank money in digital form, held by the public. Leading designs have two limitations: conversion from bank deposits into CBDC can accelerate deposit flight, requiring safeguards, and the CBDC stays outside credit creation and monetary-policy operations. Here we present a CBDC architecture based on grassroots currencies that overcomes these limitations. The architecture has three components: (1) Money: sovereign grassroots coins, which are digital debts of one unit of fiat currency issued by the central bank, constituting a direct CBDC; (2) Credit and Liquidity: non-sovereign grassroots coins, which are digital debts of one unit of the same fiat currency, redeemable at par, that can be issued by any person, natural or legal, thus adding credit; and (3) Interest: grassroots bonds, sovereign and non-sovereign, adding maturity and thus interest, standard banking instruments, and the central bank's instruments of monetary policy. The central bank can therefore lend, absorb liquidity, set its rates and buy and sell securities in the coins and bonds the public holds, choosing the counterparties and terms of its credit operations, and without converting bank deposits into newly issued central bank money on demand. We prove that the arbitrage-free price of any non-sovereign grassroots coin whose issuer redeems it on demand is one unit of the fiat currency. The central bank can choose to deal with any counterparty, not just banks, and we argue that the central bank's interest rates on lending and bonds bound from above and below the corresponding interest rates of its counterparties. Sovereign and non-sovereign grassroots coins and bonds have been implemented and tested on a small scale.

Ehud Shapiro

London School of Economics, UK · Weizmann Institute of Science, Israel

Financial Services Finance

Sep 23, 2026stat.ML

FedIncome: Federated Learning for Income Estimation in Digital Lending Under Data Sovereignty Constraints

Verified income is often unavailable in digital loan applications, forcing lenders to rely on reported income and potentially leading to over-lending, overly conservative offers, or rejection of creditworthy applicants. Cross-institutional data-sharing constraints make this problem especially difficult for smaller lenders with limited training data. We introduce FedIncome, a federated learning framework for income estimation that enables institutions to train a shared model without pooling raw borrower records. Using more than one million LendingClub loans partitioned into

50

state-level clients, we simulate a heterogeneous lending consortium. The best federated model achieves out-of-time

R^2=0.608

, compared with

0.619

for a pooled centralised benchmark. Small-sample clients obtain an average out-of-time

R^2

improvement of

3.8

percentage points relative to the pooled centralised benchmark, while the fitted client-level relationship places the empirical crossover at approximately

4,790

training observations in this setting. When pooling is infeasible and the relevant alternative is local-only training, federation improves out-of-time performance across all sample-size groups, with the largest gains for data-scarce clients. We also combine federated income estimates with state- and income-specific debt-to-income thresholds. In a retrospective decision analysis, replacing reported income with the federated estimate increases simulated approval rates with only modest changes in observed default rates. FedIncome supports collaborative learning under data-locality constraints with little aggregate loss relative to pooled training and larger gains relative to local-only estimation.

Sultan Amed, Tanmay Sen, Sayantan Banerjee

OM & QT Area, Indian Institute of Management Indore, M.P. 453556, India. · SQC & OR Unit, Indian Statistical Institute Kolkata, W.B. 700108, India

Credit Scoring Finance Federated Learning Heterogeneous Federated Learning

Sep 21, 2026cs.LG

Credit Access is Associated with Improved Food Security in the Horn of Africa

The intensification of climate change poses a growing threat to food security, especially in vulnerable communities. This study employs an observational machine-learning framework to estimate the causal association between access to credit and acute food insecurity in Somalia and across the Horn of Africa, drawing on a harmonized dataset spanning key environmental, socioeconomic, and conflict-related factors from 2015 to 2022. Results indicate that greater credit access is associated with a 2% reduction in acute food insecurity at the population level over the study period. Given that, on average, 16% of the population is in crisis, this effect represents a meaningful shift within the at-risk group. We interpret these estimates under explicit identification assumptions and complement them with robustness and refutation tests. The results provide context-specific evidence on how financial access correlates with food security outcomes in data-scarce, crisis-affected settings, and offer a transparent framework for integrating heterogeneous data sources when randomized evaluations are infeasible.

Jordi Cerdà-Bautista, Vasileios Sitokonstantinou, José Manuel Veiga López-Peña +3

Image Processing Laboratory, Universitat de València, Spain · Artificial Intelligence Group, Wageningen University & Research, Wageningen, The Netherlands · Food Security Unit, Joint Research Centre (JRC), European Commission, Ispra, Italy +2

Sep 17, 2026cs.HC

Trustworthy FinAInce: Unpacking How AI-Mediated Financial Advice is Judged

As generative AI is increasingly used as a source of personal financial guidance, understanding how people appraise such advice is important for supporting appropriate reliance. We conducted a randomized vignette experiment with 285 U.S. adults across eight financial decisions, independently varying three advice styles---AI, expert, and online community---and displayed source labels while holding the underlying recommendation consistent. Advice style most strongly shaped message and safety appraisals, Expert labels selectively increased perceived source knowledge, and decision context primarily shaped risk and safety appraisals. These appraisals were associated with downstream judgments, with models explaining 69.2% of overall quality, 75.9% of trust, and 82.9% of intended reliance. Expert-style advice also remained most preferred when shown without source labels. Our findings have implications for understanding financial advice evaluation, distinguishing the roles of advice style and source labels, and designing financial AI that supports grounded evaluation rather than simply maximizing trust.

Aryan Ramchandra Kapadia, Eshwar Chandrasekharan, Koustuv Saha

University of Illinois Urbana-Champaign, Urbana, IL, USA

Trust in AI Human-AI Decision Making Finance Financial Decision-Making

Sep 11, 2026cs.MA

But How Would AI Agents Run a Town's Economy?

We placed 100 memory-equipped large language model (LLM) agents in charge of a closed, money-conserving spatial economy on real Pokhara Lakeside geography (earning wages, running businesses, setting prices) and ran this multi-agent simulation for up to 26 simulated weeks, well past the 1-2 weeks typical of agent-society studies. Across 91 validated runs (2.44M agent decisions, 21.5B tokens), the money stops moving, in a specific and measurable way. A 12x tourist demand shock raises business revenue 4.62x (

p<0.001

), which we decompose exactly into a 1.50x extensive margin (more businesses trading) and a 3.07x intensive margin (more revenue each). Monetary transmission stops there. Wages move 1.03x (

p=0.42

); 0.3% of 3,981 menu items are ever repriced (

p=0.47

). A randomized cash transfer (NPR 5,000 to 20 of 100 agents) shows the same pattern from the opposite direction: 96.7% is still held 311 pulses later, marginal propensity to consume 3-4% by two independent measures, indistinguishable from zero. The wealth distribution is consequently near-frozen at the horizon this literature uses (

\rho=0.964

over 2 simulated weeks), but not frozen.

\rho

falls to 0.832 at 12 weeks and 0.752 at 26, a horizon-dependence no short study can see. Matched ablations show which knob actually matters. Swapping the backing LLM moves every outcome we measure (

p=0.0039

); deleting agents' memory moves none of them detectably. A purely social tool fails 94-97% of the time across two model families, compared with ~96% success on economic tools, with no measurable shift away from it. Every headline number is verified twice, by a live validator and by an offline recomputation that reconciles each agent's wealth against its own signed transaction history, and we release the full run corpus for reanalysis.

Sajal Regmi, Siddhartha Pudasaini, Chetan Phakami Pun

Karela Technologies Inc. USA

Multi-Agent LLM Systems Human Behavior Simulation Agent-Based Modeling Finance

Sep 9, 2026cs.LG

Adversarial Training for Tabular Credit Scoring: A Multi-Attack Robustness Evaluation in P2P Lending

Machine learning-based credit scoring is increasingly central to Peer-to-Peer (P2P) lending, yet its resilience to adversarial manipulation, where applicants strategically alter self-reported inputs to secure favourable decisions, remains poorly understood. Most adversarial-robustness evidence comes from image and text domains and evaluates a single attack against a matching defence, offering little guidance on how defences generalise across attack types in tabular credit data. We address this with a systematic train-test robustness benchmark on a large Lending Club subset, spanning three model families (logistic regression, a feed-forward neural network, and a transformer for tabular data) and four attacks confined to applicant-mutable features: Fast Gradient Sign Method (FGSM), Projected Gradient Descent (PGD), Salt-and-Pepper (S&P) noise, and DeepFool, plus a mixed-attack regime. Across a full grid evaluated with stratified cross-validation, adversarial training sharply improves robustness against the attack it is trained on and transfers well within the gradient-based family, but transfers weakly to non-gradient corruption, so single-attack defences overstate real-world resilience. Mixed training delivers the most balanced robustness across heterogeneous attacks while preserving clean-test performance, supporting multi-attack stress testing in credit-model governance.

Gijs A. F. Niewzwaag, Marijn G. S. Veth, Manuele Massei +1

University of Twente, Faculty of Behavioural, Management and Social Sciences, Department of High-Tech Business and Entrepreneurship, AE Enschede, 7500, Netherlands

Adversarial Training Adversarial Attacks Adversarial Robustness Credit Scoring Finance

Sep 8, 2026cs.ET

OntoKG-EQ: A provenance-grounded, competency-question-governed knowledge graph for auditable analyst querying

Analysts in emerging equity markets keep answering the same questions. Did fundamentals match the market's response? How does the local currency co-move with returns? Which firms outperform sector and benchmark, and which disclosures coincide with abnormal trading? These answers come from ad-hoc spreadsheets that are hard to reproduce, audit, or trust. We present OntoKG-EQ, a knowledge-based system that makes such queries reproducible, evidence-linked, temporally explicit, valid, and inspectable. It couples a bounded, competency-question-governed core ontology with a provenance-aware knowledge graph in which every class, property, shape, and metric is justified by one of five frozen questions. The system materialises market data into the graph, computes the metrics, validates its structure against declarative shape constraints, answers each competency question with a graph query, derives typed findings, and generates an explanation tracing each result to its observations, evidence, sources, and provenance. We evaluate on curated datasets from three emerging markets (Pakistan, Malaysia, Indonesia). Once each market's data is mapped into the common schema, the ontology, shapes, queries, and rules are reused unchanged. A relational-database baseline shows the graph changes no analytics. Its value is governance, provenance, and self-explaining structure. Because answers are rendered deterministically from the validated graph, their consistency with it is guaranteed by construction. Used as a reference, the system measures how consistently eight open language models transcribe the same evidence (provenance coverage 0.00 to 1.00). A study with a 17-participant convenience panel finds the evidence bundle significantly increased perceived trust and completeness. Code and data are openly released.

Furqan Nasir, Muhammad Atif Saeed, Muhammad Ehsan +2

City University of Science and Information Technology (CUSIT), Peshawar, Pakistan · National University of Computer and Emerging Sciences2026 (FAST-NUCES), Islamabad, Pakistan · University of Engineering and Technology (UET), Peshawar, Pakistan

KG Construction Data Provenance Knowledge Graph Question Answering Finance

Sep 2, 2026q-fin.PM

Eliciting ESG Preferences for Reinforcement Learning-Based Portfolio Optimization

Modern portfolio management increasingly demands a balance between traditional risk-adjusted returns and strict Environmental, Social, and Governance (ESG) mandates. Current Reinforcement Learning (RL) approaches typically optimize for a single ESG provider, neglecting the significant divergence in rating methodologies across the industry and the unintuitive nature of manually weighting conflicting objectives. This paper addresses these limitations by formulating ESG-aware portfolio optimization as a Multi-Objective Reinforcement Learning (MORL) problem that simultaneously incorporates ratings from three distinct ESG agencies. To bridge the gap between high-dimensional algorithmic trade-offs and human decision-making, we integrate a Preference Elicitation framework using Gaussian Processes. This system enables practitioners to infer their latent utility functions through intuitive pairwise comparisons of candidate portfolios based on their Sharpe ratios and aggregate ESG scores. We systematically evaluate our framework by employing Large Language Model (LLM) personas to simulate Portfolio Managers operating under varied regional contexts. Empirical results using historical market data reveal that regional backgrounds fundamentally shift the derived preference weights. For instance, European-based personas tend to prioritize ESG alignment over financial returns, while Texas-based personas favor risk-adjusted performance. This work offers a highly adaptable framework that successfully aligns multi-objective algorithmic trading with diverse, real-world human sustainability preferences.

Giovanni Dispoto, Marcello Restelli, Carmine Ventre

Politecnico di Milano · King’s College London

Portfolio Optimization Finance Multi-Objective Reinforcement Learning Preference Elicitation Preference Learning

Sep 1, 2026cs.LG

Toward Explainable and Policy-Aware AI for Carbon Credit Price Prediction: A Research Framework for Emerging Carbon Markets

Carbon markets put a price on emissions, yet that price remains hard to forecast. Work in this area clusters on the EU and Chinese schemes, compresses regulatory text into a sentiment score, and reports accuracy without calibration or explanation stability. We distil ten recurring gaps into an impact-feasibility matrix and propose EPA-CarbonNet, a six-layer architecture that fuses market series with policy text by cross-attention and calibrated intervals alongside policy-attributed explanations. We then build and test it on eleven years of daily S and P carbon index data. The findings are largely negative, and reported as measured: a random walk beats the model on five-day RMSE (0.0365 against 0.0475), SHAP rankings agree at rho = 0.54 across resampled backgrounds, and policy attention never coincides with documented regulatory events. Directional accuracy, at 58.6 percent, leads every baseline. Code, data documentation and all result artifacts are available at https://github.com/Kimalice/Toward-Explainable-and-Policy-Aware-AI-for-Carbon-Credit-Price-Prediction

Summaiya Unnisa Begum, Mohammed Nadeem Ullah, Mohammed Abdul Ghani Khan

Hyderabad, India · Riyadh, Saudi Arabia

Multivariate Time Series Forecasting Financial Forecasting Time Series Forecasting Finance

Sep 1, 2026cs.AI

Agentic Empirical Asset Pricing: Methodological Foundations

Recent advances in LLM agents enable a new paradigm for asset pricing, which we call Agentic Empirical Asset Pricing (AEAP): systems that autonomously conduct the scientific discovery process itself. We define AEAP and identify its core building blocks. Existing evaluation practices backtest only the outputs (factors or trades), not the autonomous discovery system that produced them. We focus on factor discovery, contributing a reference architecture, a rigorous evaluation standard for discovered factors, and a method for out-of-sample backtesting the discovery system. As a concrete instance of that architecture, we evaluate SEADS against five re-implemented baselines on two US equity panels using this standard: no single metric ranks the systems consistently, motivating evaluation on multiple axes at once. A separate rolling re-execution then asks the complementary question of whether the discovery process itself, not one static output, is reliable. We also report negative findings and limitations that surface further evaluation pitfalls for future AEAP systems.

Yingjian Pan, Xiaowei Ding, Kay Giesecke

Advanced Financial Technologies Laboratory · Stanford University · School of Information Management +1

Quantitative Finance AI Agent Evaluation Finance Autonomous Research Agents

Aug 12, 2026q-fin.ST

What Makes a Peer? Valuation-Anchored Similarity in Private Markets

As more investors contemplate private markets and contend with limited transparency, sparse disclosures, and infrequent transactions, identifying economically meaningful peer companies for comparison is a fundamental challenge for valuation, due diligence, portfolio construction, and risk management. We propose an ensemble tree-based supervised similarity learning framework that defines company similarity through the lens of market valuation rather than static feature matching or semantic descriptions. Specifically, we train a CatBoost gradient-boosted decision tree model on observed private company valuations and derive a valuation-aware similarity metric from importance-weighted leaf-node co-occurrences across the ensemble. The similarity metric captures shared valuation drivers while accommodating nonlinear relationships, mixed data types, and pervasive missing data common in private markets. Using a global private-market universe of approximately 270,000 companies, including more than 53,000 firms with observed or derivable post-money valuations spanning multiple industries, geographies, and deal stages, we demonstrate that the proposed similarity framework improves upon traditional distance-based and text-embedding-based approaches in downstream k-nearest-neighbor valuation tasks in the evaluated industry groups, while retaining case-based explainability.

Sebastian Frank, Jingrao Lyu, Max Jarmey +5

BlackRock, Inc. New York, NY, USA · BlackRock, Inc. Atlanta, GA, USA · BlackRock, Inc. London, UK +1

Aug 12, 2026q-fin.PM

Large Language Model-Driven Small-Capitalization Trading: Integrating Financial News Sentiment, Macroeconomic Indicators, and Technical Signals

Large language models can extract richer signals from financial news than fixed sentiment lexicons, and recent work has explored feeding such signals into portfolio construction. We study an uncertainty-aware construction that feeds model-predicted risk -- decomposed into aleatoric and epistemic components -- directly into the covariance matrix of portfolio allocators, rather than treating portfolio risk as fixed or adjusting only expected returns. We evaluate the pipeline on Russell 2000 equities under three stock-selection regimes: a pure-alpha trigger that isolates abnormal stock moves not explained by macro indicators, a pure-beta trigger that captures macro-indicator moves before the stock itself fires, and a beta trigger in which both channels agree. Across the full holding-period grid, the separated pure-alpha and pure-beta legs usually dominate the beta intersection on Sharpe and return. Two horizons are especially informative. At one day, pure beta can work under low and moderate transaction costs because it captures immediate lead-lag spillovers from liquid macro and sector indicators into exposed small-cap stocks, but this advantage disappears at 100 bps when turnover and microstructure noise dominate. At 40 days, pure beta works for a different reason: slower macro repricing overtakes the firm-specific pure-alpha channel. The strongest conservative row is pure beta with GPT-4o mini sentiment, a Student-t target, a 40-day holding period, and risk parity allocation, reaching Sharpe 2.33 at 100 bps. The results suggest that stock-selection regime and allocator choice matter at least as much as the sentiment model, and that separating firm-specific and macro-exposure triggers is more informative than requiring both to fire simultaneously.

Alireza Kargarzadeh, Nariman Khaledian, Navid Parvini +1

Tailstate Intelligence Ltd. · Independent Researcher · Zanista AI Ltd.

Portfolio Optimization Finance Algorithmic Trading

Aug 12, 2026q-fin.CP

AI-Driven Multiscenario Interest Rate Forecasting: A Proof of Concept for Banking Asset Management

This study focuses on developing an AI-supported prototype for multiperspective interest rate forecasting that combines classical econometric models with modern artificial intel-ligence methods. Tested in a major European bank, the system enables more precise and flexible prediction of interest rate developments, supporting strategic decision-making in Asset-Liability Management (ALM). It integrates topic modeling, sentiment analysis, econometric forecasting, and market-based analyses within an interactive platform. Leveraging AI to analyze large volumes of financial documents and market data enables the identification of monetary policy trends and sentiment signals at an early stage. The core econometric model is a Bayesian vector autoregression (BVAR) that enables simulation-based scenario analyses to evaluate economic developments from multiple perspectives. The system's innovation lies in its integration of several forecasting approaches that consolidate previously separate information sources and present them transparently and interpretably. Financial analysts and risk managers thus gain a better basis for making decisions, allowing them to assess interest rate risks more accurately and manage market movements more proactively. While the prototype demonstrates how AI can transform interest rate management in banking, further development is required to optimize real-time data integration and regulatory compliance. Even at this stage, the study shows that multi-perspective, AI-driven forecasting provides substantial added value for banks by increasing transparency, strengthening evidence-based decision-making, and improving risk management.

Ekkehardt Bauer, Dirk Holländer, Linus Wolff +3

zeb.rolfes.schierenbeck.associates Ltd. · zeb Institute for Financial Services, University Witten/Herdecke

Multivariate Time Series Forecasting Financial Time Series Finance

Aug 11, 2026cs.AI

From Numbers to Judgment: Specialist LLM Agents and Reinforcement Learning for European Listed Real Estate

We study whether the localized numerical operations and integrative judgments of financial analysis benefit from the same form of LLM specialization. Larix maps a 16-lens European listed-real-estate analysis framework to eight lens-aligned specialists; we compare a frontier LLM under monolithic versus specialist-decomposed prompting while holding the model, source evidence, task instructions, output schema, and scoring fixed. Across 19 firms spanning seven regulatory wrappers, decomposition improves the numerical-task aggregate by 15.8 percentage points but does not reliably improve, and can reduce, performance on judgment tasks, a pattern stable across four frozen-template dispatches; a single-agent control given the complete framework does not reproduce the numerical gain. Post-training Qwen3.5-9B with GRPO using task-aligned structured rewards then raises the development-split score by 12.0 points and the judgment aggregate by 14.2 points, with gains on all four sub-ceiling tasks; the gains transfer to unseen firms (+15.2 points overall; +40.4 on covenant stress) and to unseen regulatory wrappers (+4.3), with positive transfer on all three anti-memorization splits. Prompt-level decomposition thus improves modular numerical execution, whereas targeted parameter adaptation improves integrative financial judgment.

Pardis Taghavi, Santosh Bhavani

Santosh Bhavani∗

Numerical Reasoning in Language Models Multi-Agent LLM Systems LLM Agent Training Finance RL for LLM Agents

Aug 10, 2026cs.MA

Beyond Cash Flows: A Multi-Agent AI Framework for Valuing Clinical-Stage, Cross-Border Biotechnology

A new class of software systems is transforming investment analysis. Large language model agents assembled into collaborative team structures including analysts, researchers, and risk managers are increasingly deployed across financial markets. Yet current multi-agent frameworks share a critical limitation: they rely on the foundational assumption that companies can be valued through traditional cash flows. This paradigm fails in clinical-stage biotechnology, where enterprise value depends entirely on binary scientific and regulatory milestones. To bridge this gap, this paper introduces a specialized multi-agent framework. Its valuation layer translates qualitative scientific judgment into defensible valuations for pre-revenue assets; its cross-market coordination layer reconciles pricing across international venues simultaneously; and its conflict-fusion mechanism systematically arbitrates between bullish scientific conviction and cautious regulatory constraints in a domain-specific manner. Crucially, the architecture is not a speculative design: it encodes a method the author first executed by hand as sole portfolio manager of China's first dedicated cross-border biotechnology fund, a human practice that returned 127.17% against a 50.67% benchmark within sixteen months. That record is evidence for the underlying method rather than for any AI system; no implementation is evaluated here. This paper presents the framework at the architectural level, establishing foundational design principles for extending agentic investment systems into complex, event-driven asset classes they currently serve poorly.

Yuhan Fang

CPC Scientific Inc.

Multi-Agent LLM Systems Multi-Agent Coordination Multi-Agent Collaboration Finance

Aug 10, 2026cs.LG

Observational Policy Ranking for SMB Financial Guidance from Multi-Action Accounting Logs

Small and medium-sized businesses need timely financial guidance, yet historical accounting logs record self-selected and often co-occurring business changes rather than randomized recommendations. We formulate this setting as observational policy ranking: from pre-decision financial information, a policy selects one of 34 ledger-derived business-change categories for a target financial KPI. Using 85,078 company-month observations from 7,505 firms, we introduce Covariate-Adjusted Residual Policy Learning (CAR-PL), an action-wise R-learner that operates directly on multi-hot logs and regularizes selection by observational support. We compare CAR-PL with an uplift T-Learner, a conservative contextual value model, a zero-shot LLM, and non-personalized references on company-disjoint held-out firms under a shared model-assisted scoring rule. CAR-PL has the highest Gross Profit point estimate (0.084), the T-Learner has the highest Revenue point estimate (0.085), and the contextual value model has the highest Quick Ratio point estimate (0.062). CAR-PL and the T-Learner are not statistically separated on either growth KPI in matched company-clustered comparisons, while CAR-PL selects 33-34 categories and produces less concentrated selections across the catalog. Outcome-model-only scoring retains the same KPI-level point-estimate leader or top pair, and category rankings remain similar when the all-zero treatment reference is replaced by the most common training co-action pattern. These findings support objective-specific ranking of SMB financial guidance from multi-action accounting logs.

Shrutendra Harsola, Vignesh Subrahmaniam, Vikas Raturi +7

1Foresight-AI, Intuit

Causal Effect Estimation Conditional Average Treatment Effect Estimation Policy Evaluation Offline RL Finance Financial Decision-Making

Aug 6, 2026q-fin.PM

Beyond Co-Movement: Locality by Exposures Enables a Joint Factor-Graph Framework for Portfolio Diversification

Current portfolio construction methods are either agnostic to the effects of idiosyncratic shocks (standard factor models) or to the latent data structure driving systematic returns (recent graph-based approaches). This presents an opportunity to combine the complementary market aspects captured by the factor and graph domains, allowing asset allocations to operate directly on the underlying market structure, rather than on its observed co-movement or its finite-sample artefacts. In this work, we introduce the Mutually-INformed Graph-Locality and Exposures framework (MINGLE), which mutually regularises the factor and graph domains by redefining graph locality through systematic factor exposure profiles, rather than via observed co-movements. This is formalised through a unified Alternating Direction Method of Multipliers (ADMM) framework that jointly learns a latent factor representation and its induced graph topology directly from market returns. The resulting exposure-similarity graph aligns more closely with established economic sectors than conventional correlation-based graphs. Portfolios constructed from this representation are shown to consistently outperform their correlation-based counterparts across a range of volatility regimes and transaction cost levels. For rigour, paired statistical testing confirms that these gains stem from the reconciliation of the graph and factor domains.

Sara Chehab, Giorgos Iacovides, Parisa Yazdanparast +1

Imperial College London London, UK

Graph Structure Learning Quantitative Finance Portfolio Optimization Finance

Aug 6, 2026cs.CL

Confidence Estimation for Financial Vision-Language Models in Chart and Document Understanding

LVLMs are increasingly used to read financial charts, tables, and documents, where a single misread figure can move a decision and the most authoritative-looking answer is sometimes one the model produced without reading the exhibit. The operational question is therefore trust, not accuracy: which answers can be acted on, and which escalated to a reviewer. We evaluate seven confidence estimators, three inference-only and four trained internal probes, across five open-weight LVLMs and four conditions from three financial visual question-answering benchmarks, one bilingual; every probe is trained only on natural images and applied to finance without adaptation, so the results measure out-of-distribution transfer. Three findings hold. First, the scarce property is calibration, not ranking: the inference baselines rank correct above incorrect answers competitively but are badly overconfident, calibration error far above what a threshold can tolerate, and only the trained probes produce a thresholdable score. Second, reliability is structured rather than global, along two axes a practitioner can read directly: the best estimator shifts with both model and task, none leading more than eight of twenty (model, condition) cells, and a controlled bilingual contrast exposes an apparent language robustness as a composition artifact that dissolves once models are read one at a time. Third, cast as deferral under an error budget, how much can be safely automated is set first by the model's competence and only narrowed by its confidence, so deferral clears a real share of the easiest condition and almost none of the hardest, near zero at a strict 5% budget. Two trained probes carry the calibration a deferral policy needs, and among them only the grounding-aware one lowers its confidence on answers a model gives without using the figure, separating detected non-grounding from a fluent guess.

Reza Khanmohammadi, Simerjot Kaur, Charese H. Smiley +2

Michigan State University East Lansing, Michigan, USA · JPMorgan AI Research New York, New York, USA

Visual Question Answering Selective Prediction VLM Calibration Finance

Aug 6, 2026cs.CE

OpenPM: Auditable Point-in-Time Evaluation for LLM Portfolio-Management Agents

Large language models are increasingly used to read markets, assess risk, and allocate capital. However, reported results for LLM trading agents can be inflated by look-ahead leakage, optimistic execution, and risk mandates that are described but not enforced. We present OpenPM, an auditable point-in-time evaluation framework for LLM portfolio-management agents. In OpenPM, an agent manages a $1M long-only book over the S&P 500 universe using market data at five-minute intervals. Every record visible to the agent must be available at the decision time. Natural-language risk mandates are converted into typed constraints and enforced on the executed portfolio. Each run produces audit artifacts, including a contamination certificate, a cost-sensitivity curve, and a constraint-adherence report. We also build a reference agent named the tiered allocator, where typed analysts score candidates, a constructor LLM proposes weights, and a deterministic critic guarantees feasibility. We isolate constructor behavior by capturing analyst evidence once and replaying it across constructor models. In our short-window case study, stronger constructors show modest and model-dependent gains over equal weighting on the same pool, but analyst quality matters more than constructor choice, and turnover is the main cost driver. All returns are upper bounds on a single frozen window without market impact, not validated alpha.

Xinying Cai, Minghao Guo, Jiahe Liu +7

Rutgers University · Technical University of Denmark · New Jersey Institute of Technology +4

LLM Auditing LLM Agent Evaluation Portfolio Optimization Finance

Aug 6, 2026cs.AI

FinEvo-Bench: A Longitudinal Benchmark for Self-Evolving Agents in Professional Financial Workflows

Agents used over time encounter recurring professional work: each case requires different evidence and judgment, while the underlying workflow can be reused. Benchmarks built from independent tasks cannot reveal whether an agent turns earlier experience into better procedures for later cases. We introduce FinEvo-Bench, a longitudinal benchmark designed around this structure. It contains 120 open-ended tasks drawn from real cases across 20 business scenes in six financial domains. Each scene contains six substantively different cases that share a professional workflow and an expert-authored rubric for task quality and financial compliance. Constructing and validating the benchmark required approximately 1,200 person-hours. Finance provides a natural test bed because recurring analyses apply shared professional and compliance requirements to heterogeneous inputs, producing case-specific analyses and conclusions. We evaluate four self-evolving agent scaffolds with Qwen3.7-Max on three independently shuffled, globally interleaved task streams. A Claude Code rubric judge backed by Claude Opus4.6 evaluates all outputs, and paired state-reset controls estimate each scaffold's gain from retained experience. Evolving runs score 9.33--19.37 points higher and trigger 0.12--0.44 fewer compliance issues per task than their paired controls. Paired score gains at within-scene ranks4--6 exceed those at ranks~1--3 by 6.10--8.70 points. FinEvo-Bench measures whether retained experience improves later professional work under continued use.

Bo Deng, Kang Zhou, Lifan Guo +6

Beihang University · Qwen DianJin Team, Alibaba Cloud Computing

Long-Horizon Agent Evaluation AI Agent Benchmarks Finance Self-Evolving Agents

Aug 6, 2026cs.AI

Evaluating Investment Logic in Large Language Models: A Real-World Benchmark Towards Personalzied Financial Agents

Investment competence is inherently personalized: the same market evidence can justify different actions for investors with different goals, horizons, portfolios, and risk boundaries. Yet financial LLMs are evaluated either by static question answering or by terminal profit and loss. The former omits agency; the latter cannot reveal whether a profitable action was grounded, profile-consistent, or merely lucky. We ask whether the community is using the wrong ruler for consequential agents. We introduce \textsc{InvestLogicBench}, a process-native benchmark containing 201,247 documented decisions from 151 real-world investors. Each episode instantiates a \textbf{P

\rightarrow

E

\rightarrow

R

\rightarrow

D

\rightarrow

O} trace: investor \textit{Profile}, observable market \textit{Events}, investment \textit{Reasoning}, executable \textit{Decision}, and delayed \textit{Outcome}. The release includes profile construction, point-in-time event binding, structured logic, horizons, outcomes, and post-mortems, and supports comprehension, profile-conditioned generation, and end-to-end replay. Across four leading LLMs, logical plausibility remains near 4/5 while event grounding is only 0.8--2.8/5; return and process quality also disagree. These results expose polished but weakly grounded reasoning that outcome-only evaluation hides. We further argue that P

\rightarrow

E

\rightarrow

R

\rightarrow

D

\rightarrow

O should be a data-system interface, requiring versioned profiles, temporal provenance, inspectable retrieval, decision ledgers, and replayable outcomes. Finance is our stress test for a broader class of personalized, consequential agents.

Yuanhong Jiang, Jingjie Zou, Zhenghong Lin +4

AI-Assisted Decision Making LLM Agent Evaluation AI Agent Benchmarks LLM Decision-Making Finance Financial Decision-Making

Aug 5, 2026q-fin.TR

Velocity- and Regime-Aware Detection of Intraday Options Market Manipulation, with Explainable Attribution

Intraday market manipulation is hard to detect because its footprint is brief, buried in millions of quotes, and statistically similar to ordinary volatility. Detectors reach high recall only by flagging so many other days that measured precision collapses, producing alerts no regulator can act on. We show that this manipulation leaves a distinctive dynamic signature: a pump-and-crash pattern visible in the velocity of market state, rather than its level. We build a minute-level detection pipeline, strictly partitioned in time, based on smoothed state velocity: option-Delta velocity for index options and price velocity for equities. We explain every alert with SHAP attribution. We hold the test period strictly out-of-sample and fix all thresholds before evaluation. On the locked Indian BANKNIFTY index-options test, the plain autoencoder recovers 10 of 10 regulator-identified manipulation days. Conditioning detection on market regimes inferred by a hidden Markov model yields an instructive negative result. The regimes are descriptively distinct, but using them trades recall for precision. Under the closed-world assumption that unlabeled days are normal, precision remains near 25%. The same dynamic appears in thinly traded U.S. equities (SEC v. Patel). The shape of the signature survives the transfer; its velocity magnitude does not. A pump-reversal shape score ranks the complaint's alleged manipulation days with AUC 0.91 (ARQQ) and 0.81 (ACY). On the ARQQ worked example, the score peaks inside the complaint's documented minute window. Finally, exact SHAP attribution over every alert shows that unconfirmed alerts share the regulator-identified days' attribution profile (cosine similarity 0.99). The precision ceiling is consistent with incomplete enforcement labels rather than detector failure. What transfers across markets and instrument types is the dynamic signature itself.

Alex Chen, Maria Hybinette

University of Georgia · Athens, GA, USA

Financial Fraud Detection Time-Series Anomaly Detection Finance

Aug 5, 2026cs.LG

An Emerging Retail Portfolio Management Application: Personalized, Tax-Aware Reinforcement Learning with Natural Language Goals

Retail investors lack access to the kind of personalized, tax-aware portfolio management that institutional clients take for granted -- existing robo-advisors use static, rule-based allocation, and institutional-grade systems require account minimums and technology stacks unavailable to individual investors. We present a fully built, integration-tested application that closes this gap: a FastAPI backend and web dashboard that let a user describe an investment goal in plain language (e.g. "I want steady growth but need to sell some shares next month for a down payment"), routes that goal to one of six investment mandates, and produces a live, broker-integrated portfolio recommendation from athree-phase reinforcement learning system -- a self-supervised cross-asset encoder, a Mixture-of-Experts (MoE) allocation policy with a learned intent router, and a lightweight LoRA adapter that personalizes recommendations from an individual's revealed brokerage behavior without retraining the shared model. The system is functionally complete and integration-tested end-to-end against a live brokerage API (Alpaca, paper-trading mode), including multi-user authentication, a trust first preview-before-apply confirmation flow, daily email digests, and an auditable action-integrity chain, but has not yet been opened to real end-users; we report this honestly as an emerging, pre-deployment application with a concrete path to full deployment, alongside 14-day walk-forward backtests (bootstrapped confidence intervals included) as preliminary, pre-deployment validation rather than production performance. We also report several practical engineering lessons -- silently-inactive integration paths, hanging third-party API calls, and the value of end-to-end empirical verification over trusting checkpoint metadata -- that we believe generalize to other applied RL systems built on external, live data sources.

Ramin Pishehvar

Reinforcement Learning Portfolio Optimization Goal-Conditioned RL Finance Financial Decision-Making

Aug 5, 2026cs.CL

FinReportBench: Measuring and Improving Institution-Grade Financial Report Generation

Large language models can produce fluent financial analysis, but fluency alone does not establish whether a report is suitable for institutional delivery. We introduce FinReportBench, an expert-grounded benchmark for measuring and improving institution-grade financial report generation. Expert review reveals recurring gaps in report identity, institutional components, source discipline, and visual delivery. We derive a 35-item rubric through expert partial orders, multimodal evidence, and audits of decision boundaries, covering deliverability, report identity, and institutional completeness. Starting from 10,000 balanced Chinese and English financial-research source records, we curate 244 bilingual tasks across three research objects and two input tiers. Each task separates the public query, reconstructed research trajectory, and hidden source packet. Three independent judge families reproduce the expert partial order at near-ceiling rates, showing that bounded, observable criteria support reliable evaluation. Across nine model families, basic deliverability is nearly saturated, while report identity and institutional completeness remain the primary bottlenecks. The largest cross-model gaps concern generation-trace control, information density, and data discipline rather than basic report framing. We then use benchmark-guided skill distillation to turn recurrent failures into reusable generation and self-review constraints. Across five model families, the evolved skill improves mean G1 by 33.85 points and mean G2 by 13.83 points over paired no-skill runs while preserving G0 for every pair. Code and benchmark artifacts are available at https://github.com/MisterBrookT/finreportbench.

Yinghao Tang, Tan Zhenwei, Yiyao Wang +4

State Key Laboratory of CAD&CG, Zhejiang University · Ant Group

Financial Services LLM Evaluation Long-Form Document Generation Rubric-Based Evaluation Finance

Aug 5, 2026cs.LG

Adaptive Finite-Budget Training for CVaR Risk-Aware Q-Learning

Risk-aware Q-learning (RaQL) provides a model-free, two-timescale estimator for dynamic risk objectives, but its finite-budget behavior remains fragile: fixed inner-loop hyperparameters can produce unstable value estimates, persistent Bellman residuals, and inefficient sample reuse. This paper proposes an adaptive training controller for Conditional Value-at-Risk (CVaR) RaQL and evaluates it on a daily Bitcoin trading task. The controller preserves the original CVaR estimator and Bellman fixed point; instead, it redesigns the training procedure through six coordinated mechanisms: per-cell inner-step sizing, outer-rate-matched decay synchronization, a short early correction for the VaR-like inner variable, a coverage-first-then-greedy sample allocation rule, progressive suffix aggregation of mature inner estimates, and data-driven calibration of key scales from online-observable quantities. Across 20 random seeds and 856,000 inner-transition samples, the controller reduces the mean empirical CVaR Bellman residual by approximately 85% relative to the fixed-parameter baseline (MeanBEQ: 1.2202 to 0.1854; MeanBEV: 1.1624 to 0.0535) and maintains stability across CVaR levels, discount factors, and training budgets. On the chronological out-of-sample test set, the learned policy attains a Sharpe ratio of 0.9281 with a maximum drawdown of 6.46% after transaction costs. Although buy-and-hold yields a higher cumulative return (35.43% vs. 23.61%), the adaptive policy achieves far lower volatility (9.57% vs. 47.93%), drawdown, and CVaR loss. These results demonstrate that adaptive finite-budget training design, applied solely to the training procedure without altering the risk objective, can materially improve the reliability and risk-adjusted performance of risk-aware Q-learning in financial applications.

Yifan Wu, Junjie Lei, Wenjie Huang

Department of Data and Systems Engineering The University of Hong Kong Hong Kong, Hong Kong SAR

Reinforcement Learning Q-Learning Risk-Sensitive RL Conditional Value-at-Risk Finance

Aug 4, 2026q-fin.MF

From Financial Sentiment Classification to Return Predictability: A QLoRA Benchmark of Large Language Models

Financial sentiment classifiers are commonly evaluated against human labels, but strong linguistic performance does not necessarily imply economically useful return predictability. This study separates these questions through two experiments. First, we construct a unified three-class benchmark from five financial text datasets and compare TF--IDF Naive Bayes, off-the-shelf FinBERT and Financial-RoBERTa encoders, zero-shot Qwen2.5-7B, and QLoRA-adapted Qwen2.5-7B, LLaMA3-8B, and Mistral-7B models. Mistral-7B achieves the best test accuracy (0.8840) and macro-F1 (0.8771), while QLoRA raises Qwen2.5's macro-F1 from 0.7274 to 0.8615. An inverse-frequency class-weighted loss does not improve Qwen2.5. Second, we evaluate economic validity on a temporally separate 2019 Benzinga sample containing 10,637 unique headlines and 13,115 headline--stock observations for a fixed S&P~100 universe. Model probabilities are converted into continuous sentiment scores, aggregated by stock and signal date, and aligned with next-session returns over one-, two-, three-, and five-day horizons. All seven downstream models produce positive but small mean rank information coefficients at the one-day horizon; the largest is 0.0143 for FinBERT. None of the 28 model--horizon tests remains significant after Newey--West inference and false-discovery-rate correction. Portfolio results likewise fail to establish a robust advantage for the best-performing classifiers. The findings show that QLoRA is effective for financial sentiment adaptation, while also documenting a clear gap between classification accuracy and tradable cross-sectional signals.

Fusheng Luo

Johns Hopkins University Baltimore, Maryland, USA

LLM Evaluation Quantitative Finance Financial Sentiment Analysis Low-Rank Adaptation Quantization-Aware LoRA Finance