arXiv research

An asset network systemic risk (ANWSER) model is presented to investigate the impact of how shadow banks are intermingled in a financial system on the severity of financial contagion. Particularly, the focus of this study is the impact of the following three representative topologies of an interbank loan network betwee…

The study compares profitability of conventional and Islamic banks in Bangladesh.

Study on electronic banking satisfaction in Nigeria.

Study analyzes profitability and efficiency of Chinese banks, finding state-owned banks superior.

The European sovereign debt crisis has impaired many European banks. The distress on the European banks may transmit worldwide, and result in a large-scale knock-on default of financial institutions. This study presents a computer simulation model to analyze the risk of insolvency of banks and defaults in a bank credit…

This paper examines SVB's failure and its impact on bank stocks.

We report a study of a stylized banking cascade model investigating systemic risk caused by counter party failure using liabilities and assets to define banks' balance sheet. In our stylized system, banks can be in two states: normally operating or distressed and the state of a bank changes from normally operating to d…

We consider the problem of governing systemic risk in an assets-liabilities dynamical model of banking system. In the model considered each bank is represented by its assets and its liabilities.The capital reserves of a bank are the difference between assets and liabilities of the bank. A bank is solvent when its capit…

This study uses high-frequency data to identify early warning signals for bank crises.

Analysis finds no evidence of banks managing deposit run risk prior to 2023 Regional Banking Crisis.

Study examines factors influencing lending to SMEs by Kenyan banks.

Bangladesh's banking sector improved through financial reforms, but challenges remain.

Study evaluates profitability of Islamic banks in Bangladesh using ROA, ROE, and ROD.

A modern version of Monetary Circuit Theory with a particular emphasis on stochastic underpinning mechanisms is developed. It is explained how money is created by the banking system as a whole and by individual banks. The role of central banks as system stabilizers and liquidity providers is elucidated. It is shown how…

Modeling financial contagion through bank networks, revealing solvency correlations.

We analyze the influence and interactions of 60 largest world banks for 195 world countries using the reduced Google matrix algorithm for the English Wikipedia network with 5 416 537 articles. While the top asset rank positions are taken by the banks of China, with China Industrial and Commercial Bank of China at the f…

In the wake of the still ongoing global financial crisis, bank interdependencies have come into focus in trying to assess linkages among banks and systemic risk. To date, such analysis has largely been based on numerical data. By contrast, this study attempts to gain further insight into bank interconnections by tappin…

The paper discusses fairness in bank stress tests, comparing various methods to address institutional differences.

Oil prices affect Russian banks' stability, with negative impacts from decreases.

Based on an empirical analysis of the network structure of the Austrian inter-bank market, we study the flow of funds through the banking network following exogenous shocks to the system. These shocks are implemented by stochastic changes in variables like interest rates, exchange rates, etc. We demonstrate that the sy…

The paper models systemic risk in European and U.S. banks using factor copulas.

Bailouts in financial networks are hard to optimize due to NP-hardness.

Study evaluates sustainability of European banks using a new model.

We use bank-level balance sheet data from 2005 to 2010 to study interactions within the banking system of five emerging countries: Argentina, Brazil, Mexico, South Africa, and Taiwan. For each country we construct a financial network based on the leverage ratio dependence between each pair of banks, and find results th…

Study assesses the impact of Basel III reforms on Bangladeshi banks.

We consider the problem of governing systemic risk in a banking system model. The banking system model consists in an initial value problem for a system of stochastic differential equations whose dependent variables are the log-monetary reserves of the banks as functions of time. The banking system model considered gen…

Commercial banks and other depository institutions in some countries are required to hold in reserve against deposits made by their customers at their Central Bank or Federal Reserve. Although some countries have been eliminated it, this requirement is useful as one of many Central Bank's regulation made to control rat…

Islamic banks being commercial entities strive to earn profit within shariah ambit. Therefore, they seem to be basing themselves upon two knowledge streams namely i) Islamic jurisprudence principles, and ii) banking principles. Islamic jurisprudence principles primarily aim at bringing shariah compliance while banking …

The negative externalities from an individual bank failure to the whole system can be huge. One of the key purposes of bank regulation is to internalize the social costs of potential bank failures via capital charges. This study proposes a method to evaluate and allocate the systemic risk to different countries/regions…

Study models systemic risks in BRICS banks under geopolitical shocks.

We propose a simple model of inter-bank borrowing and lending where the evolution of the log-monetary reserves of $N$ banks is described by a system of diffusion processes coupled through their drifts in such a way that stability of the system depends on the rate of inter-bank borrowing and lending. Systemic risk is ch…

This paper investigates two mechanisms of financial contagion that are, firstly, the correlated exposure of banks to the same source of risk, and secondly the direct exposure of banks in the interbank market. It will consider a random network of banks which are connected through the inter-bank market and will discuss t…

Central banks play a key role in promoting sustainable finance.

AI enhances bank credit risk management through deep learning and data analysis.

Develops a framework for synthetic banking microdata evaluation.

Study compares Islamic banks' accounting and market performance.

Study examines financial performance determinants of Kenyan microfinance banks.

We consider a model of financial contagion in a bipartite network of assets and banks recently introduced in the literature, and we study the effect of power law distributions of degree and balance-sheet size on the stability of the system. Relative to the benchmark case of banks with homogeneous degrees and balance-sh…

FinTech negatively impacts Chinese banks' financial sustainability.

As economic entities become increasingly interconnected, a shock in a financial network can provoke significant cascading failures throughout the system. To study the systemic risk of financial systems, we create a bi-partite banking network model composed of banks and bank assets and propose a cascading failure model …

Model predicts Mozambique bank failures, aiding risk management.

We explore a model of the interaction between banks and outside investors in which the ability of banks to issue inside money (short-term liabilities believed to be convertible into currency at par) can generate a collapse in asset prices and widespread bank insolvency. The banks and investors share a common belief abo…

In [1] Zawadoski introduces a banking network model in which the asset and counter-party risks are treated separately and the banks hedge their assets risks by appropriate OTC contracts. In his model, each bank has only two counter-party neighbors, a bank fails due to the counter-party risk only if at least one of its …

Paper introduces a specialized text classification system for French Open Banking transactions.

We study the incentives of banks in a financial network, where the network consists of debt contracts and credit default swaps (CDSs) between banks. One of the most important questions in such a system is the problem of deciding which of the banks are in default, and how much of their liabilities these banks can pay. W…

Study examines large banks' role in interbank markets using game theory.

Swapping debt contracts can mitigate risk in financial networks.

This study compares decentralized banks and finds some lack decentralization.