The Network Topology of the Interbank Market

The Network Topology of the Interbank Market

25 Sep 2003 | Michael Boss1, Helmut Elsinger2, Martin Summer1, and Stefan Thurner3
The paper provides an empirical analysis of the network structure of the Austrian interbank market using a unique dataset from the Oesterreichische Nationalbank (OeNB). The study reveals that the contract size distribution follows a power law over more than three decades. The interbank network exhibits a community structure that mirrors the regional and sectoral organization of the Austrian banking system. The degree distribution shows two different power law exponents, corresponding to two sub-network structures with varying degrees of hierarchical organization. The network also displays typical structural features of complex real-world networks, such as a low clustering coefficient and a relatively short average shortest path length. These findings contrast with theoretical models and highlight the stability and robustness of the Austrian interbank network. The analysis uses a novel "dissimilarity" measure to identify communities and an entropy-based estimation technique to reconstruct the liability matrix. The results provide insights into the network topology and suggest that the Austrian interbank market is structurally similar to those in other European countries.The paper provides an empirical analysis of the network structure of the Austrian interbank market using a unique dataset from the Oesterreichische Nationalbank (OeNB). The study reveals that the contract size distribution follows a power law over more than three decades. The interbank network exhibits a community structure that mirrors the regional and sectoral organization of the Austrian banking system. The degree distribution shows two different power law exponents, corresponding to two sub-network structures with varying degrees of hierarchical organization. The network also displays typical structural features of complex real-world networks, such as a low clustering coefficient and a relatively short average shortest path length. These findings contrast with theoretical models and highlight the stability and robustness of the Austrian interbank network. The analysis uses a novel "dissimilarity" measure to identify communities and an entropy-based estimation technique to reconstruct the liability matrix. The results provide insights into the network topology and suggest that the Austrian interbank market is structurally similar to those in other European countries.
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[slides and audio] Network topology of the interbank market