Systemic risk in banking ecosystems.

by Andrew G Haldane, Robert M May
Nature ()
Get full text at journal

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.

Cite this document (BETA)

Readership Statistics

644 Readers on Mendeley
by Discipline
 
24% Biological Sciences
 
16% Economics
 
10% Environmental Sciences
by Academic Status
 
30% Ph.D. Student
 
11% Post Doc
 
10% Student (Master)
by Country
 
5% United States
 
5% United Kingdom
 
2% Germany

Sign up today - FREE

Mendeley saves you time finding and organizing research. Learn more

  • All your research in one place
  • Add and import papers easily
  • Access it anywhere, anytime

Start using Mendeley in seconds!

Sign up & Download

Already have an account? Sign in