Related papers: Failure dynamics of the global risk network
In recent times, the functioning of various aspects of modern society---ranging from the various infrastructural utilities such as electrical power, water to socio-economical aspects such as telecommunications, business, commerce,…
Cascading failures and epidemic dynamics, as two successful application realms of network science, are usually investigated separately. How do they affect each other is still one open, interesting problem. In this letter, we couple both…
We study dynamic risk measures in a very general framework enabling to model uncertainty and processes with jumps. We previously showed the existence of a canonical equivalence class of probability measures hidden behind a given set of…
Systemic liquidity risk, defined by the IMF as "the risk of simultaneous liquidity difficulties at multiple financial institutions", is a key topic in macroprudential policy and financial stress analysis. Specialized models to simulate…
Numerous online services are data-driven: the behavior of users affects the system's parameters, and the system's parameters affect the users' experience of the service, which in turn affects the way users may interact with the system. For…
Natural systems are remarkably robust and resilient, maintaining essential functions despite variability, uncertainty, and hostile conditions. Understanding these nonlinear, dynamic behaviours is challenging because such systems involve…
In an increasingly complex, mobile and interconnected world, we face growing threats of disasters, whether by chance or deliberately. Disruption of coordinated response and recovery efforts due to organizational, technical, procedural,…
In recent years the research community has accumulated overwhelming evidence for the emergence of complex and heterogeneous connectivity patterns in a wide range of biological and sociotechnical systems. The complex properties of real-world…
A classic measure of ecological stability describes the tendency of a community to return to equilibrium after small perturbation. While many advances show how the network structure of these communities severely constrains such tendencies,…
This paper investigates two mechanisms of financial contagion that are, firstly, the correlated exposure of banks to the same source of risk, and secondly the direct exposure of banks in the interbank market. It will consider a random…
Networks in nature do not act in isolation but instead exchange information, and depend on each other to function properly. An incipient theory of Networks of Networks have shown that connected random networks may very easily result in…
We develop a structural default model for interconnected financial institutions in a probabilistic framework. For all possible network structures we characterize the joint default distribution of the system using Bayesian network…
We survey systemic risks to financial markets and present a high-level description of an algorithm that measures systemic risk in terms of coupled networks.
The theory of multilayer networks is in its early stages, and its development provides vital methods for understanding complex systems. Multilayer networks, in their multiplex form, have been introduced within the last three years to…
Typically, contagion strength is modeled by a transmission rate $\lambda$, whereby all nodes in a network are treated uniformly in a mean-field approximation. However, local agents react differently to the same contagion based on their…
Many systems, ranging from engineering to medical to societal, can only be properly characterized by multiple interdependent networks whose normal functioning depends on one another. Failure of a fraction of nodes in one network may lead to…
The importance of adequately modeling credit risk has once again been highlighted in the recent financial crisis. Defaults tend to cluster around times of economic stress due to poor macro-economic conditions, {\em but also} by directly…
The risk of conflict is exasperated by a multitude of internal and external factors. Current multivariate analysis paints diverse causal risk profiles that vary with time. However, these profiles evolve and a universal model to understand…
The fragility of financial systems was starkly demonstrated in early 2023 through a cascade of major bank failures in the United States, including the second, third, and fourth largest collapses in the US history. The highly interdependent…
Recent studies have investigated various dynamic processes characterizing collective behaviors in real-world systems. However, these dynamics have been studied individually in specific contexts. In this article, we present a holistic…