Assessing Systemic Risk and Structural Vulnerability in the EU & Global Banking Sector through Network Analysis
Dr Farhad Reyazat
June 2016
In June 2016, I introduced a novel metric for systemic risk that captures the degree of both direct and indirect interconnections among banks, utilizing a correlation-based network approach. This method quantifies interconnectedness as a risk factor, empirically demonstrating how banking network interconnections influence systemic risk. The study sheds light on cross-border banking activities and compares the resilience of the US banking system to European counterparts. It recommends further exploration in areas like global risk monitoring enhancements and the correlation between banking sector risks and macroeconomic indicators. This research underlines the critical need to comprehend banking sector interdependencies to mitigate systemic risks effectively. We present a comprehensive risk concentration index by analyzing bilateral exposure cascades and the concentration of connections within selected networks, leveraging unique datasets of bank exposures, balance sheets, and economic indicators. This work enhances the current academic discourse by detailing the banking network’s structure and inter-bank dependencies at the country level, contributing to systemic risk. It equips policymakers with analytical tools for assessing the financial system’s complex dependency structures and the impact of regulatory decisions, offering insights into managing systemic risks more effectively. See the full article below
18 replies on “Assessing Systemic Risk and Structural Vulnerability in the EU & Global Banking Sector through Network Analysis”
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I don’t think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.
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I don’t think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.
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I don’t think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.
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Can you be more specific about the content of your article? After reading it, I still have some doubts. Hope you can help me.
I don’t think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.
I don’t think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.
Thank you for your sharing. I am worried that I lack creative ideas. It is your article that makes me full of hope. Thank you. But, I have a question, can you help me?
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