After a little over a month of development, beta version 1.0 of the tool is now ready. It is an open source project sponsored by Norges Bank. The code is available at fna.sourceforge.net (get in touch with me to participate) and the documentation on Google docs. Currently the tool has a command line user interface and its main features include:
- Construction of networks from payment/trade data where an arc (link) is established if a payment/trade takes place between the banks. Further payments/trades add to the weight of the arc. Aggregation interval can be based on the number of payments/trades, on their value or on their timing (e.g. daily networks)
- The networks generated can be edited (transposed, made symmetric) and vertices (nodes) can be dropped based on any of their properties that are calculated (e.g. all nodes without outgoing links or smaller than some threshold value)
- A number of statistics can be calculated for the vertices and arcs, e.g. betweenness centrality, random walk betweenness, eigenvector centrality, PageRank, HITS, average shortest paths, reciprocity, eccentricity, strength, loops and degree. Strong and weak components of the network can be identified.
- Networks, vertices and arcs and their properties can be viewed on screen
- Networks can be saved as vertex/arclists or in Pajek format to f ile for further analysis.
To install the tool simply download fna1.0b and copy the contents of the .zip file to some directory. You start the program from start.bat. You can try that it works by typing:
run -file data/script.txt
it runs script.txt file (in /data folder) which contains some commands to build and analyze networks created from example data (also under the /data folder). Please let me know of any bugs or needs for improvement.
For other similar tools, see the Social network analysis software article on wikipedia
ECB promotes research on emerging front: “Too networked to fail”
The ECB conference "Recent advances in modelling systemic risk using network analysis" was featured today in Securities Operations Week – a weekly publication focused on US and global securities operations, technology and compliance:
"The financial crisis that began to emerge in 2007 and that gained steam in 2008 famously gave rise to the oft-cited slogan “too big to fail.” It also saw the coinage of a lesser-known catchphrase kicked around commonly now in research circles: “too networked to fail". A summation released last week by the European Central Bank offers what may be the best discussion to date on the subject. [read the full article (pdf)]