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Evolution of controllability in interbank networks.


ABSTRACT: The Statistical Physics of Complex Networks has recently provided new theoretical tools for policy makers. Here we extend the notion of network controllability to detect the financial institutions, i.e. the drivers, that are most crucial to the functioning of an interbank market. The system we investigate is a paradigmatic case study for complex networks since it undergoes dramatic structural changes over time and links among nodes can be observed at several time scales. We find a scale-free decay of the fraction of drivers with increasing time resolution, implying that policies have to be adjusted to the time scales in order to be effective. Moreover, drivers are often not the most highly connected "hub" institutions, nor the largest lenders, contrary to the results of other studies. Our findings contribute quantitative indicators which can support regulators in developing more effective supervision and intervention policies.

SUBMITTER: Delpini D 

PROVIDER: S-EPMC3620902 | biostudies-other | 2013

REPOSITORIES: biostudies-other

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Evolution of controllability in interbank networks.

Delpini Danilo D   Battiston Stefano S   Riccaboni Massimo M   Gabbi Giampaolo G   Pammolli Fabio F   Caldarelli Guido G  

Scientific reports 20130101


The Statistical Physics of Complex Networks has recently provided new theoretical tools for policy makers. Here we extend the notion of network controllability to detect the financial institutions, i.e. the drivers, that are most crucial to the functioning of an interbank market. The system we investigate is a paradigmatic case study for complex networks since it undergoes dramatic structural changes over time and links among nodes can be observed at several time scales. We find a scale-free dec  ...[more]

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