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The neuroanatomical connectivity of cortical circuits is believed to follow certain rules, the exact origins of which are still poorly understood. In particular, numerous nonrandom features, such as common neighbor clustering, overrepresentation of reciprocal connectivity, and overrepresentation of certain triadic graph motifs have been experimentally observed in cortical slice data. Some of these data, particularly regarding bidirectional connectivity are seemingly contradictory, and the reasons for this are unclear. Here we present a simple static geometric network model with distance-dependent connectivity on a realistic scale that naturally gives rise to certain elements of these observed behaviors, and may provide plausible explanations for some of the conflicting findings. Specifically, investigation of the model shows that experimentally measured nonrandom effects, especially bidirectional connectivity, may depend sensitively on experimental parameters such as slice thickness and sampling area, suggesting potential explanations for the seemingly conflicting experimental results.
We propose a framework for estimating network-driven time-varying systemic risk contributions that is applicable to a high-dimensional financial system. Tail risk dependencies and contributions are estimated based on a penalized two-stage fixed-effects quantile approach, which explicitly links bank interconnectedness to systemic risk contributions. The framework is applied to a system of 51 large European banks and 17 sovereigns through the period 2006 to 2013, utilizing both equity and CDS prices. We provide new evidence on how banking sector fragmentation and sovereign-bank linkages evolved over the European sovereign debt crisis and how it is reflected in network statistics and systemic risk measures. Illustrating the usefulness of the framework as a monitoring tool, we provide indication for the fragmentation of the European financial system having peaked and that recovery has started.