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Packet replication and elimination functions are used by time-sensitive networks (as in the context of IEEE TSN and IETF DetNet) to increase the reliability of the network. Packets are replicated onto redundant paths by a replication…

Networking and Internet Architecture · Computer Science 2022-08-23 Ludovic Thomas , Ahlem Mifdaoui , Jean-Yves Le Boudec

We propose a statistical model for weighted temporal networks capable of measuring the level of heterogeneity in a financial system. Our model focuses on the level of diversification of financial institutions; that is, whether they are more…

Applications · Statistics 2018-08-15 Juraj Hledik , Riccardo Rastelli

We analyze cascades of defaults in an interbank loan market. The novel feature of this study is that the network structure and the size distribution of banks are derived from empirical data. We find that the ability of a defaulted…

Statistical Finance · Quantitative Finance 2016-01-21 Fariba Karimi , Matthias Raddant

The analysis of complex and time-evolving interactions like social dynamics represents a current challenge for the science of complex systems. Temporal networks stand as a suitable tool to schematise such systems, encoding all the appearing…

Recent research has tried to extend the concept of renormalization, which is naturally defined for geometric objects, to more general networks with arbitrary topology. The current attempts do not naturally apply to directed networks, for…

Physics and Society · Physics 2024-03-04 Margherita Lalli , Diego Garlaschelli

In spite of the growing theoretical literature on cascades of failures in interbank lending networks, empirical results seem to suggest that networks of direct exposures are not the major channel of financial contagion. In this paper we…

General Finance · Quantitative Finance 2013-06-18 Fabio Caccioli , J. Doyne Farmer , Nick Foti , Daniel Rockmore

Since Nowak & May's (1992) influential paper, network reciprocity--the fact that individuals' interactions repeated within a local neighborhood support the evolution of cooperation--has been confirmed in several theoretical models.…

Adaptation and Self-Organizing Systems · Physics 2019-05-07 Fabio Dercole , Fabio Della Rossa , Carlo Piccardi

To unravel the driving patterns of networks, the most popular models rely on community detection algorithms. However, these approaches are generally unable to reproduce the structural features of the network. Therefore, attempts are always…

Social and Information Networks · Computer Science 2022-09-07 Martina Contisciani , Hadiseh Safdari , Caterina De Bacco

How, and to what extent, does an interconnected financial system endogenously amplify external shocks? This paper attempts to reconcile some apparently different views emerged after the 2008 crisis regarding the nature and the relevance of…

Risk Management · Quantitative Finance 2016-08-30 Gabriele Visentin , Stefano Battiston , Marco D'Errico

Complex non-linear interactions between banks and assets we model by two time-dependent Erd\H{o}s Renyi network models where each node, representing bank, can invest either to a single asset (model I) or multiple assets (model II). We use…

Risk Management · Quantitative Finance 2015-06-19 B. Podobnik , D. Horvatic , M. Bertella , L. Feng , X. Huang , B. Li

Network (or matrix) reconstruction is a general problem which occurs if the margins of a matrix are given and the matrix entries need to be predicted. In this paper we show that the predictions obtained from the iterative proportional…

Methodology · Statistics 2019-09-05 Michael Lebacher , Göran Kauermann

The network inference problem consists of reconstructing the edge set of a network given traces representing the chronology of infection times as epidemics spread through the network. This problem is a paradigmatic representative of…

Data Structures and Algorithms · Computer Science 2013-08-14 Bruno Abrahao , Flavio Chierichetti , Robert Kleinberg , Alessandro Panconesi

We study the mean field approximation of a recent model of cascades on networks relevant to the investigation of systemic risk control in financial networks. In the model, the hypothesis of a trend reinforcement in the stochastic process…

Physics and Society · Physics 2007-11-13 Jan Lorenz , Stefano Battiston

Relationship lending is broadly interpreted as a strong partnership between a lender and a borrower. Nevertheless, we still lack consensus regarding how to quantify the strength of a lending relationship, while simple statistics such as the…

Trading and Market Microstructure · Quantitative Finance 2018-10-11 Teruyoshi Kobayashi , Taro Takaguchi

Banks in the interbank network can not assess the true risks associated with lending to other banks in the network, unless they have full information on the riskiness of all the other banks. These risks can be estimated by using network…

Risk Management · Quantitative Finance 2013-01-28 Stefan Thurner , Sebastian Poledna

Measurement and management of credit concentration risk is critical for banks and relevant for micro-prudential requirements. While several methods exist for measuring credit concentration risk within institutions, the systemic effect of…

General Finance · Quantitative Finance 2019-07-09 Davide Cellai , Trevor Fitzpatrick

Evaluation of systemic risk in networks of financial institutions in general requires information of inter-institution financial exposures. In the framework of Debt Rank algorithm, we introduce an approximate method of systemic risk…

Risk Management · Quantitative Finance 2021-04-14 Sebastian M. Krause , Hrvoje Štefančić , Vinko Zlatić , Guido Caldarelli

A resource exchange network is considered, where exchanges among nodes are based on reciprocity. Peers receive from the network an amount of resources commensurate with their contribution. We assume the network is fully connected, and…

Social and Information Networks · Computer Science 2018-12-27 Konstantinos P. Tsoukatos

This paper provides the first empirical network analysis of the Argentine interbank money market. Its main topological features are examined applying graph theory, focusing on the unsecured overnight loans settled from 2003 to 2017. The…

Physics and Society · Physics 2021-02-17 Federico Forte

We exploit the symmetry concepts developed in the companion review of this article to introduce a stochastic version of link reversal symmetry, which leads to an improved understanding of the reciprocity of directed networks. We apply our…

General Finance · Quantitative Finance 2010-11-04 Franco Ruzzenenti , Diego Garlaschelli , Riccardo Basosi