Journal of Network Theory in Finance

Risk.net

Structural changes in the interbank market across the financial crisis from multiple core–periphery analysis

Sadamori Kojaku, Giulio Cimini, Guido Caldarelli and Naoki Masuda

  • We study the eMID interbank market using a novel core-periphery detection method to unveil its high-order network organization.
  • We reveal multiple core-periphery pairs, and detect both tiered and bow-tie (bipartite) structures.
  • We reveal a topological transition of the market at the global financial crisis, in terms of network segregation and organization.

Interbank markets are often characterized in terms of a core–periphery network structure, with a highly interconnected core of banks holding the market together and a periphery of banks connected mostly to the core but not internally. This paradigm has recently been challenged for short time scales, where interbank markets seem better characterized by a bipartite structure with more core–periphery connections than inside the core. Using a novel core–periphery detection method on the electronic market for interbank deposits (eMID), we enrich this picture by showing that the network is actually characterized by multiple core–periphery pairs. Moreover, a transition from core–periphery to bipartite structures occurs by shortening the temporal scale of data aggregation. Further, we show how the global financial crisis transformed the market in terms of composition, multiplicity and internal organization of core– periphery pairs. By unveiling such a fine-grained organization and transformation of the interbank market, our method can find important applications in the understanding of how distress can propagate over financial networks.
 

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here