Related papers: Cascading Failures in the Global Financial System:…
Cascading failures constitute an important vulnerability of interconnected systems. Here we focus on the study of such failures on networks in which the connectivity of nodes is constrained by geographical distance. Specifically, we use…
In complex networks, the failure of one or very few nodes may cause cascading failures. When this dynamical process stops in steady state, the size of the giant component formed by remaining un-failed nodes can be used to measure the…
Real systems are usually composed by units or nodes whose activity can be interrupted and restored intermittently due to complex interactions not only with the environment, but also with the same system. Majdand\v{z}i\'c $et\;al.$ [Nature…
Trading activities in financial systems create various channels through which systemic risk can propagate. An important contagion channel is financial fire sales, where a bank failure causes asset prices to fall due to asset liquidation,…
Recently, large-scale cascading failures in complex systems have garnered substantial attention. Such extreme events have been treated as an integral part of the self-organized criticality (SOC). Recent empirical work has suggested that…
We consider a model of contagion in financial networks recently introduced in the literature, and we characterize the effect of a few features empirically observed in real networks on the stability of the system. Notably, we consider the…
Large scale networks delineating collective dynamics often exhibit cascading failures across nodes leading to a system-wide collapse. Prominent examples of such phenomena would include collapse on financial and economic networks.…
Complex evolving systems such as the biosphere, ecosystems and societies exhibit sudden collapses, for reasons that are only partially understood. Here we study this phenomenon using a mathematical model of a system that evolves under…
This work explores the characteristics of financial contagion in networks whose links distributions approaches a power law, using a model that defines banks balance sheets from information of network connectivity. By varying the parameters…
We introduce a general model for the balance-sheet consistent valuation of interbank claims within an interconnected financial system. Our model represents an extension of clearing models of interdependent liabilities to account for the…
This paper develops a dynamic internal fraud model for operational losses in retail banking. It considers public operational losses arising from internal fraud in retail banking within a group of international banks. Additionally, the model…
We analyse the importance of international relations between countries on the financial stability. The contagion effect in the network is tested by implementing an epidemiological model, comprising a number of European countries and using…
In this paper, we introduce a distributed control strategy to prevent dynamically-induced cascading failures in power grids. We model power grids using complex networks and nonlinear dynamics to provide a coarse-grained description of the…
In normal times, it is assumed that financial institutions operating in non-overlapping sectors have complementary and distinct outcomes, typically reflected in mostly uncorrelated outcomes and asset returns. Such is the reasoning behind…
Online social networks have increasing influence on our society, they may play decisive roles in politics and can be crucial for the fate of companies. Such services compete with each other and some may even break down rapidly. Using social…
A growing body of studies on systemic risk in financial markets has emphasized the key importance of taking into consideration the complex interconnections among financial institutions. Much effort has been put in modeling the contagion…
In this paper we analyze the resilience of a network of banks to joint price fluctuations of the external assets in which they have shared exposures, and evaluate the worst-case effects of the possible default contagion. Indeed, when the…
The financial market is a complex dynamical system composed of a large variety of intricate relationships between several entities, such as banks, corporations and institutions. At the heart of the system lies the stock exchange mechanism,…
The field of Financial Networks is a paramount example of the novel applications of Statistical Physics that have made possible by the present data revolution. As the total value of the global financial market has vastly outgrown the value…
Cascading failures, wherein the failure of one component triggers subsequent failures in complex interconnected systems, pose a significant risk of disruptions and emerge across various domains. Understanding and mitigating the risk of such…