Complex systems: Ecology for bankers

By Kimmo Soramäki | Published: March 14, 2008

Our research on banking networks (“The Topology of Interbank Payment Flows” in Physica A, Vol. 379, pp 317-333, 2007) was recently featured in the Nature magazine (No. 451, 21 February 2008). The article “Complex systems: Ecology for bankers” discusses the commonalities in analysing financial networks and ecosystems – especially as regards their vulnerabilities. The picture below shows the core of funds flows in the US payment system Fedwire. The system has over 8000 banks but 75% of the value is transferred between 66 banks. Flows between large money center banks are visible as links with a higher weights.

See also:

Resiliance Science blog entry

New Directions for Understanding Systemic Risk (2007) by John Kambhu, Scott Weidman, and Neel Krishnan

Congressional testimony

The core of the US banking network

The core of the US banking network



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