Title |
Bankruptcy Cascades in Interbank Markets
|
---|---|
Published in |
PLOS ONE, December 2012
|
DOI | 10.1371/journal.pone.0052749 |
Pubmed ID | |
Authors |
Gabriele Tedeschi, Amin Mazloumian, Mauro Gallegati, Dirk Helbing |
Abstract |
We study a credit network and, in particular, an interbank system with an agent-based model. To understand the relationship between business cycles and cascades of bankruptcies, we model a three-sector economy with goods, credit and interbank market. In the interbank market, the participating banks share the risk of bad debits, which may potentially spread a bank's liquidity problems through the network of banks. Our agent-based model sheds light on the correlation between bankruptcy cascades and the endogenous economic cycle of booms and recessions. It also demonstrates the serious trade-off between, on the one hand, reducing risks of individual banks by sharing them and, on the other hand, creating systemic risks through credit-related interlinkages of banks. As a result of our study, the dynamics underlying the meltdown of financial markets in 2008 becomes much better understandable. |
X Demographics
Geographical breakdown
Country | Count | As % |
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Germany | 1 | 14% |
Spain | 1 | 14% |
Ireland | 1 | 14% |
Unknown | 4 | 57% |
Demographic breakdown
Type | Count | As % |
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Members of the public | 6 | 86% |
Scientists | 1 | 14% |
Mendeley readers
Geographical breakdown
Country | Count | As % |
---|---|---|
Germany | 2 | 3% |
United States | 2 | 3% |
Vietnam | 1 | 1% |
United Kingdom | 1 | 1% |
Luxembourg | 1 | 1% |
Unknown | 67 | 91% |
Demographic breakdown
Readers by professional status | Count | As % |
---|---|---|
Student > Master | 18 | 24% |
Student > Ph. D. Student | 13 | 18% |
Researcher | 12 | 16% |
Student > Bachelor | 5 | 7% |
Professor | 3 | 4% |
Other | 11 | 15% |
Unknown | 12 | 16% |
Readers by discipline | Count | As % |
---|---|---|
Economics, Econometrics and Finance | 20 | 27% |
Agricultural and Biological Sciences | 8 | 11% |
Business, Management and Accounting | 6 | 8% |
Computer Science | 6 | 8% |
Social Sciences | 5 | 7% |
Other | 13 | 18% |
Unknown | 16 | 22% |