scholarly journals Finding the Network Structure of Rwandan Interbank Market

2021 ◽  
Vol 12 (3) ◽  
pp. 435
Author(s):  
Patrick Mugenzi ◽  
Thomas Kigabo Rusuhuzwa ◽  
Annie Uwimana
Keyword(s):  
Network Structure ◽  
Policy Implication ◽  
Financial System ◽  
Policy Formulation ◽  
Interbank Market ◽  
Complete Network

The objective of this paper was to analyze the topology of interbank network in Rwanda for policy formulation. Our main result is that interbank market network in Rwanda is described by a core- periphery model with some level of completeness of interbank market in Rwanda. As policy implication, any risk from a bank is more easily shared within the interbank market network provided that there is nearly a complete network. This is an indication that the risk of instability of the financial system in Rwanda originating from interbank market is limited.

Finance and Investment: The European Case

2018 ◽  
Keyword(s):  
Sovereign Debt ◽  
Large Body ◽  
Policy Research ◽  
Financial System ◽  
Research Programme ◽  
Policy Formulation ◽  
Contributory Factor ◽  
Data Sets ◽  
Equity Financing ◽  
Body Of Knowledge

This book is the product of a two-year research programme entitled Restarting European Long-Term Investment Finance (RELTIF), organized by Assonime and the Centre for Economic Policy Research (CEPR) in London. The programme brought together leading researchers from across the world to consider the causes of the persistently low level of investment in Europe, to examine the extent to which the financial system was a contributory factor and to identify possible policy remedies for it. It considered the relation of finance to corporate sector investment, the lending behaviour of banks, the provision of equity financing, the role of public sector institutions, regulation, and taxation. The chapters in this volume provide one of the most comprehensive and thorough analyses of any financial system that has been undertaken to date. They reflect a large body of research using new and existing data sets, employing advanced empirical tools, and exploiting the unique insights provided by the tumultuous events of the financial and sovereign debt crises. Together they comprise an exceptional body of knowledge to advance academic thinking and guide policy formulation in the future.

scholarly journals Asymmetric Network Connectedness of Fears

2020 ◽  
pp. 1-41
Author(s):  
Jozef Baruník ◽  
Mattia Bevilacqua ◽  
Radu Tunaru
Keyword(s):  
Network Structure ◽  
Systemic Risk ◽  
Financial System ◽  
Option Prices ◽  
Economic Uncertainty ◽  
Macroeconomic Conditions ◽  
Market Participants ◽  
Risk Monitoring ◽  
Network Connectedness ◽  
Forward Looking

This paper introduces forward-looking measures of the network connectedness of fears in the financial system, arising due to the good and bad beliefs of market participants about uncertainty that spreads unequally across a network of banks. We argue that this asymmetric network structure extracted from call and put traded option prices of the main U.S. banks contains valuable information for predicting macroeconomic conditions and economic uncertainty, and it can serve as a tool for forward-looking systemic risk monitoring.

Network structure analysis of the Brazilian interbank market

2016 ◽  
Vol 26 ◽  
pp. 130-152 ◽  
Author(s):  
Thiago Christiano Silva ◽  
Sergio Rubens Stancato de Souza ◽  
Benjamin Miranda Tabak
Keyword(s):  
Structure Analysis ◽  
Network Structure ◽  
Interbank Market ◽  
Network Structure Analysis

scholarly journals Collective Moral Hazard and the Interbank Market

2020 ◽  
Vol 2020 (098) ◽  
pp. 1-60
Author(s):  
Levent Altinoglu ◽  
◽  
Joseph E. Stiglitz ◽  
Keyword(s):  
Moral Hazard ◽  
Financial Institutions ◽  
Portfolio Choice ◽  
Risk Taking ◽  
Financial System ◽  
Interbank Market ◽  
Constrained Efficiency ◽  
Macroprudential Regulation ◽  
Systemic Crisis ◽  
The Government

The concentration of risk within financial system is considered to be a source of systemic instability. We propose a theory to explain the structure of the financial system and show how it alters the risk taking incentives of financial institutions. We build a model of portfolio choice and endogenous contracts in which the government optimally intervenes during crises. By issuing financial claims to other institutions, relatively risky institutions endogenously become large and interconnected. This structure enables institutions to share the risk of systemic crisis in a privately optimal way, but channels funds to relatively risky investments and creates incentives even for smaller institutions to take excessive risks. Constrained efficiency can be implemented with macroprudential regulation designed to limit the interconnectedness of risky institutions.

What Matters in Determining Capital Surcharge for Systemically Important Financial Institutions?

2013 ◽  
pp. 211-224 ◽  
Author(s):  
Céline Gauthier ◽  
Toni Gravelle ◽  
Xuezhi Liu ◽  
Moez Souissi
Keyword(s):  
Financial Institutions ◽  
Banking System ◽  
Financial System ◽  
Centrality Measures ◽  
Network Structures ◽  
Interbank Market ◽  
Small Bank ◽  
Good Proxy ◽  
What Matters

One way of internalising the externalities each individual bank imposes on the rest of the financial system is to impose capital surcharges (KS) on them in line with their systemic importance. Given the complexity of the financial system and the resulting difficulties in measuring systemic importance, it is sometimes argued to simply apply higher KS to larger banks, abstracting from other factors like interconnectedness. In this chapter, the authors consider different network structures of the banking system that are characterized by two different centrality measures. Their main finding is that size alone is not always a good proxy for systemic importance and must be supplemented with detailed information on interbank exposures. A relatively small bank playing an outsized role in the interbank market might be more systemic, and thus garner a higher capital surcharge, than a less connected bank of somewhat larger size. Alternatively, if the centrality of banks in an interbank network is positively correlated with their size, then proxies of a bank’s systemic importance largely based on size are sufficient indicators.

An Introduction to Finance and Investment

2018 ◽  
Author(s):  
Colin Mayer ◽  
Stefano Micossi ◽  
Marco Onado ◽  
Marco Pagano ◽  
Andrea Polo
Keyword(s):  
Sovereign Debt ◽  
Large Body ◽  
Financial System ◽  
Policy Formulation ◽  
Data Sets ◽  
Body Of Knowledge ◽  
The Future ◽  
Debt Crises ◽  
European Economies ◽  
Existing Data

This chapter reviews the problems of finance and investment confronting European economies and summarizes the approaches that can be adopted to address them. The chapters in this volume provide one of the most comprehensive and thorough analyses of any financial system that has been undertaken to date. They reflect a large body of research using new and existing data sets, employing advanced empirical tools, and exploiting the unique insights provided by the tumultuous events of the financial and sovereign debt crises. Together they therefore comprise an exceptional body of knowledge to guide policy formulation in the future.

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