Systemic risk in banking ecosystems
Top Cited Papers
- 19 January 2011
- journal article
- Published by Springer Science and Business Media LLC in Nature
- Vol. 469 (7330), 351-355
- https://doi.org/10.1038/nature09659
Abstract
In the run-up to the recent financial crisis, an increasingly elaborate set of financial instruments emerged, intended to optimize returns to individual institutions with seemingly minimal risk. Essentially no attention was given to their possible effects on the stability of the system as a whole. Drawing analogies with the dynamics of ecological food webs and with networks within which infectious diseases spread, we explore the interplay between complexity and stability in deliberately simplified models of financial networks. We suggest some policy lessons that can be drawn from such models, with the explicit aim of minimizing systemic risk.This publication has 29 references indexed in Scilit:
- Systemic risk: the dynamics of model banking systemsJournal of The Royal Society Interface, 2009
- Network and eigenvalue analysis of financial transaction networksZeitschrift für Physik B Condensed Matter, 2009
- Cooperative network dynamicsNature, 2009
- Compilation and Network Analyses of Cambrian Food WebsPLoS Biology, 2008
- Network structure and the biology of populationsTrends in Ecology & Evolution, 2006
- Macro lessons from microstructureInternational Journal of Finance & Economics, 2006
- Market force, ecology and evolutionIndustrial and Corporate Change, 2002
- General Black-Scholes models accounting for increased market volatility from hedging strategiesApplied Mathematical Finance, 1998
- Networks of sexual contactsAIDS, 1989
- Fluctuations of Animal Populations and a Measure of Community StabilityEcology, 1955