The last financial crisis exposed critical gaps in our understanding of the financial system and in the policy tools available to mitigate threats to financial stability. Neither regulators nor market participants appreciated fully the relationships among interconnectedness, risk-taking, and financial stability. Since then, there has been an increasing interest in networks as a critical tool for describing the structure of financial system, and evaluating the potential system wide losses due to contagion. In this talk I will review basic network concepts and their application in finance, and demonstrate different network based tools and applications to study and monitor financial stability.
About Dror Kennett:
Dr. Kennett’s work focuses on monitoring and managing systemic risk in the financial system. His research interests are varied, including the foundations of network theory, nonlinear dynamics and complex theory, the application of advanced time series analysis in finance and economics, mathematical finance, and econophysics.