Related papers: Pathways towards instability in financial networks
Risks threatening modern societies form an intricately interconnected network that often underlies crisis situations. Yet, little is known about how risk materializations in distinct domains influence each other. Here we present an approach…
An asset network systemic risk (ANWSER) model is presented to investigate the impact of how shadow banks are intermingled in a financial system on the severity of financial contagion. Particularly, the focus of this study is the impact of…
Poor economies not only produce less; they typically produce things that involve fewer inputs and fewer intermediate steps. Yet the supply chains of poor countries face more frequent disruptions---delivery failures, faulty parts, delays,…
The concept of Turing instability, namely that diffusion can destabilize the uniform steady state, is well known either in the context of partial differential equations (PDEs) or in networks of dynamical systems. Recently reaction-diffusion…
We consider a banking network represented by a system of stochastic differential equations coupled by their drift. We assume a core-periphery structure, and that the banks in the core hold a bubbly asset. The banks in the periphery have not…
Complex networks are universal, arising in fields as disparate as sociology, physics, and biology. In the past decade, extensive research into the properties and behaviors of complex systems has uncovered surprising commonalities among the…
Financial networks are typically estimated by applying standard time series analyses to price-based economic variables collected at low-frequency (e.g., daily or monthly stock returns or realized volatility). These networks are used for…
We introduce a simple model for addressing the controversy in the study of financial systems, sometimes taken as brownian-like processes and other as critical systems with fluctuations of arbitrary magnitude. The model considers a…
Financial market is an example of complex system, which is characterized by a highly intricate organization and the emergence of collective behavior. In this paper, we quantify this emergent dynamics in the financial market by using…
It was recently recognized that interdependencies among different networks can play a crucial role in triggering cascading failures and hence system-wide disasters. A recent model shows how pairs of interdependent networks can exhibit an…
In the past few years, the discoveries of small-world and scale-free properties of many natural and artificial complex networks have stimulated significant advances in better understanding the relationship between the topology and the…
Recent work in the area of interdependent networks has focused on interactions between two systems of the same type. However, an important and ubiquitous class of systems are those involving monitoring and control, an example of…
The consensus that complexity begets stability in ecosystems was challenged in the seventies, a result recently extended to ecologically-inspired networks. The approaches assume the existence of a feasible equilibrium, i.e. with positive…
Complex dynamical systems are often modeled as networks, with nodes representing dynamical units which interact through the network's links. Gene regulatory networks, responsible for the production of proteins inside a cell, are an example…
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…
Financial markets, being spectacular examples of complex systems, display rich correlation structures among price returns of different assets. The correlation structures change drastically, akin to phase transitions in physical phenomena,…
We use rank correlations as distance functions to establish the interconnectivity between stock returns, building weighted signed networks for the stocks of seven European countries, the US and Japan. We establish the theoretical…
Dynamical patterns in complex networks of coupled oscillators are both of theoretical and practical interest, yet to fully reveal and understand the interplay between pattern emergence and network structure remains to be an outstanding…
Financial networks have become extremely useful in characterizing the structure of complex financial systems. Meanwhile, the time evolution property of the stock markets can be described by temporal networks. We utilize the temporal network…
We test the hypothesis that interconnections across financial institutions can be explained by a diversification motive. This idea stems from the empirical evidence of the existence of long-term exposures that cannot be explained by a…