Dynamic Modeling Systemic Risk in Financial Networks
This event is part of the PhD Final Oral Exams.
Examining Committee: H. Eugene Stanley, Irena Vodenska, William Skocpol, Plamen Ivanov
Modern financial networks are complicated structures that can contain multiple types of nodes and connections between those nodes. Banks, governments and even individual people weave into an intricate network of debt, risk correlations and many other forms of intercon- nectedness. We explore the results of the Federal Reserve report "Banking Organization Systemic Risk Report," which surveys the largest US banks on their level of interconnect- edness, to develop a network model of these banks with connections based on real data. This network model is then stress-tested under a number of scenarios to determine systemic risks inherent in the network structure. The results of these models are useful as a guideline for new regulatory standards in the banking industry that focus on the health of the entire banking network rather than only of individual banks.