Liaisons dangereuses: Increasing connectivity, risk sharing, and systemic risk

By Stefano Battiston, Domenico Delli Gatti, Mauro Gallegati, B. Greenwald, Joseph E. Stiglitz. 2012

713 citations recorded by the source corpus.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/7398463326e753077c5c4408be11537902c11dfa

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Citations in the corpus

A Network Analysis of Global Banking:1978-2009 (2011, neutral): “Battiston et al. (2010) assess how network density (measured as the number of connecting links) relates to systemic risk in a model of the economy as a credit network, arguing that while higher connectivity allows for improved risk sharing of distress propagation, it also leads to a mechanism of…”
Economies of contagion: financial crisis and pandemic (2013, background): “int/csr/outbreaknetwork/en/ 19 See, however, the argument presented by Battiston et al. (2009), who question whether the diversification of risk leads to a more stable financial situation.”
Networks, Shocks, and Systemic Risk (2015, neutral): “Some of the more recent examples include Gai, Haldane, and Kapadia (2011), Battiston et al. (2012), Alvarez and Barlevy (2014) and Glasserman and Young (2015).”
DebtRank: Too Central to Fail? Financial Networks, the FED and Systemic Risk (2012, background): “An important limitation of default cascade models is that they do not account for the fact that, even when the default does not propagate from a node to a successor, there is still a propagation of distress (Battiston et al., 2012a).”
RESILIENCE TO CONTAGION IN FINANCIAL NETWORKS (2011, positive): “While in the case of Battiston et al. (2012), this nonmonotonicity is due to a mechanism of “financial accelerators,” which enacts on top of the network contagion effects, in our case, the trade-off between risk-sharing and contagion is inherent in the network topology.”
Bank relationships, business cycles, and financial crises (2011, background): “Many recent papers on financial networks analyze the potential for the spread of contagion in various exogenous network structures using simulation methods (Battiston et al., 2009; May & Arinaminpathy, 2010; Mirchev et al., 2010; Nier et al., 2007; Sachs, 2010).”
Too Interconnected to Fail: A Survey of the Interbank Networks Literature (2015, background): “Similarly, Battiston et al. (2012b) argue that due to a positive feedback loop resulting from a financial acceleration mechanism, more connections lead to greater fragility in the financial system.”
The Emergence of Global Systemic Risk (2015, background): “As a result, the financial system had the characteristics of a complex, dynamic system (May et al. 2008), including the potential for tipping points and system-wide cascading failures (Battiston et al. 2012, Gai & Kapadia 2010).”
Transmission channels of systemic risk and contagion in the European financial network (2015, neutral): “Allen et al. (2011) observe that full risk diversification is not optimal in the banking industry, while Battiston et al. (2012) find that the financial system can be more resilient for intermediate levels of risk diversification.”