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FinSentGPT: A universal financial sentiment engine?

Author

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  • Ardekani, Aref Mahdavi
  • Bertz, Julie
  • Bryce, Cormac
  • Dowling, Michael
  • Long, Suwan(Cheng)

Abstract

We present FinSentGPT, a financial sentiment prediction model based on a fine-tuned version of the artificial intelligence language model, ChatGPT. To assess the model’s effectiveness, we analyse a sample of US media news and a multi-language dataset of European Central Bank Monetary Policy Decisions. Our findings demonstrate that FinSentGPT’s sentiment classification ability aligns well with a prominent English-language finance sentiment model, surpasses an established alternative machine learning model, and is capable of predicting sentiment across various languages. Consequently, we offer preliminary evidence that advanced large-language AI models can facilitate flexible and contextual financial sentiment determination, transcending language barriers.

Suggested Citation

  • Ardekani, Aref Mahdavi & Bertz, Julie & Bryce, Cormac & Dowling, Michael & Long, Suwan(Cheng), 2024. "FinSentGPT: A universal financial sentiment engine?," International Review of Financial Analysis, Elsevier, vol. 94(C).
    • Handle: RePEc:eee:finana:v:94:y:2024:i:c:s1057521924002230
    DOI: 10.1016/j.irfa.2024.103291
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    References listed on IDEAS

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    1. Picault, Matthieu & Pinter, Julien & Renault, Thomas, 2022. "Media sentiment on monetary policy: Determinants and relevance for inflation expectations," Journal of International Money and Finance, Elsevier, vol. 124(C).
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    3. Korinek, Anton, 2023. "Language Models and Cognitive Automation for Economic Research," CEPR Discussion Papers 17923, C.E.P.R. Discussion Papers.
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    More about this item

    Keywords

    ChatGPT; Large language models; Financial sentiment; Monetary policy; Fine-tuning;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications

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