Financial contagion in a core-periphery interbank network

Sui, Peng; Tanna, Sailesh; Zhou, Dandan

doi:10.1080/1351847x.2019.1630460

Cited by 13 publications

(8 citation statements)

References 41 publications

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“…These results were recently repeated in an experiment by Sui et al. (2020), who showed that the network’s resilience increases with the number of core and periphery banks, respectively.…”

Section: Results Of Integrative Review: the Affecting Factorsmentioning

confidence: 68%

“…In another study by Leventides et al (2019), the likelihood of contagion and, consequently, instability declined as the authors moved the network from smaller to larger settings. These results were recently repeated in an experiment by Sui et al (2020), who showed that the network's resilience increases with the number of core and periphery banks, respectively.…”

Section: Network Characteristicsmentioning

confidence: 77%

“…Recently, Sui et al. (2020) repeated this experiment separately for core and periphery banks in the network. Their study on financial contagion in core‐periphery interbank networks suggested that increasing the size of core banks increases their resilience to initial liquidity shocks and periphery banks’ failure.…”

Section: Results Of Integrative Review: the Affecting Factorsmentioning

confidence: 99%

“…Such a mechanism enables banks to plan and trade in the market not only to meet their immediate needs but also to advance their liquidity needs in the future (Iori et al., 2015). This strand of research covers all types of short‐ and long‐term liquidity (Lux, 2015), secured and unsecured loans (León et al., 2018), with or without central bank intervention (Ladley, 2013), and all topologies of the interbank network (Sui et al., 2020). Contagion —Future orientation in contagion and systemic risk research, as the main concern of the interbank market, includes three strands.…”

Section: Future Research Directionsmentioning

confidence: 99%

See 3 more Smart Citations

Interbank money market concerns and actors’ strategies—A systematic review of 21st century literature

Alaeddini

Madiès

Reaidy

et al. 2022

Journal of Economic Surveys

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As the reallocator of liquidity from banks with excess to banks with a deficit, the interbank money market (IMM) plays a fundamental role in the proper functioning of the banking system and the economy as a whole. The aggregate uncertainty derived from stochasticity of the overall level of the demand for short-term liquidity and the likelihood of domino failures of tightly connected competitors who lend themselves vast amounts of liquidity explains the complexity of decisions in this environment. To identify the most significant factors influencing actors' strategies, we first present the five underlying patterns discovered through a bibliometric analysis of 609 scientific documents in this field: contagion and systemic risk, stability, market structure, relationship and trust, and default and failure. Then, our detailed study findings on 160 recent works indicate elements that affect central banks' strategies in reducing systemic risk and preventing financial contagion, as well as managing the interbank network in a way that makes it more stable and resilient to shocks to conserve market confidence. Furthermore, they address factors that influence banks' strategies to maintain their lending relationships and mitigate default risk. In addition toThis is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.

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“…These results were recently repeated in an experiment by Sui et al. (2020), who showed that the network’s resilience increases with the number of core and periphery banks, respectively.…”

Section: Results Of Integrative Review: the Affecting Factorsmentioning

confidence: 68%

Section: Network Characteristicsmentioning

confidence: 77%

Section: Results Of Integrative Review: the Affecting Factorsmentioning

confidence: 99%

Section: Future Research Directionsmentioning

confidence: 99%

See 2 more Smart Citations

Interbank money market concerns and actors’ strategies—A systematic review of 21st century literature

Alaeddini

Madiès

Reaidy

et al. 2022

Journal of Economic Surveys

View full text Add to dashboard Cite

show abstract

“…This capability also allows it to be widely applied in the financial field along with SNA. Sui et al [2019] constructed a core-periphery interbank network that distinguishes financial banks by balance sheet size and connections to investigate the financial contagion. In the cryptocurrency market, the core-periphery structure of stable assets based on liquidity and capital inferred by a network feature has been examined to study the market impact and evolution [Polovnikov et al 2020].…”

Section: Literature Reviewmentioning

confidence: 99%

Is decentralized finance actually decentralized? A social network analysis of the Aave protocol on the Ethereum blockchain

Ao¹,

Horváth²,

Zhang³

2022

Preprint

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Decentralized finance (DeFi) has the potential to disrupt centralized finance by validating peer-to-peer transactions through tamper-proof smart contracts and thus significantly lower the transaction cost charged by financial intermediaries. However, the actual realization of peer-to-peer transactions and the levels and effect of decentralization are largely unknown. Our research pioneers a blockchain network study that applies social network analysis to measure the level, dynamics, and impacts of decentralization in DeFi token transactions on Ethereum blockchain. First, we find a significant core-periphery structure in the AAVE token transaction network where the cores include the two largest centralized crypto exchanges. Second, we provide evidence that multiple network features consistently characterize decentralization dynamics. Finally, we document that a more decentralized network significantly predicts a higher return and lower volatilities of the DeFi tokens. We point out that our approach is seminal for inspiring future extensions related to the facets of application scenarios, research questions, and methodologies on the mechanics of blockchain decentralization.

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Multilayer interbank networks and systemic risk propagation: Evidence from China

Yan,

Ding,

Liu

et al. 2023

Physica A: Statistical Mechanics and its Applications

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Financial contagion in a core-periphery interbank network

Abstract: This document is the author's post-print version, incorporating any revisions agreed during the peer-review process. Some differences between the published version and this version may remain and you are advised to consult the published version if you wish to cite from it.

Cited by 13 publications

References 41 publications

Interbank money market concerns and actors’ strategies—A systematic review of 21st century literature

Interbank money market concerns and actors’ strategies—A systematic review of 21st century literature

Is decentralized finance actually decentralized? A social network analysis of the Aave protocol on the Ethereum blockchain

Multilayer interbank networks and systemic risk propagation: Evidence from China

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