The papers from today’s program highlight how direct and indirect interlinkages and contagion dynamics among financial institutions, as well as among institutions, markets and infrastructures, can be significantly influenced by three important network characteristics: First, the degree of connectivity, second, the degree of concentration and third, the size of exposures.
We see from the papers that network analysis can help to better understand the interlinkages and systemic connections in many different segments of the financial markets, ranging from money markets to networks of credit default swaps (CDSs), and from largevalue payment systems to cross-sector exposures in the euro area financial system.