@inproceedings{xu-etal-2025-finripple,
    title = "{F}in{R}ipple: Aligning Large Language Models with Financial Market for Event Ripple Effect Awareness",
    author = "Xu, Yuanjian  and
      Hao, Jianing  and
      Tang, Kunsheng  and
      Chen, Jingnan  and
      Liu, Anxian  and
      Liu, Peng  and
      Zhang, Guang",
    editor = "Che, Wanxiang  and
      Nabende, Joyce  and
      Shutova, Ekaterina  and
      Pilehvar, Mohammad Taher",
    booktitle = "Findings of the Association for Computational Linguistics: ACL 2025",
    month = jul,
    year = "2025",
    address = "Vienna, Austria",
    publisher = "Association for Computational Linguistics",
    url = "https://preview.aclanthology.org/transition-to-people-yaml/2025.findings-acl.489/",
    doi = "10.18653/v1/2025.findings-acl.489",
    pages = "9377--9398",
    ISBN = "979-8-89176-256-5",
    abstract = "Financial markets exhibit complex dynamics where localized events trigger ripple effects across entities. Previous event studies, constrained by static single-companies analyses and simplistic assumptions, fail to capture these ripple effects. While large language models (LLMs) offer emergent reasoning capabilities, their direct application falters due to structural market unawareness and limited capacity to analyze ripple effects. We propose FinRipple, an elegant framework that empowers LLMs with the ability to analyze ripple effects through financial theory-guided large-scale reinforcement learning. We begin by relaxing the assumptions of previous methods, incorporating a time-varying knowledge graph to accurately represent market structure. By seamlessly integrating classical asset pricing theory, we align the LLM with the market, enabling it to predict ripple effects. To the best of our knowledge, we are the first to provide a standardized definition of ripple effect prediction, a task that is extremely important yet unexplored in the financial domain. Extensive experiments demonstrate that FinRipple provides a promising solution to this task."
}