Mitigating cascades in sandpile models: an immunization strategy for systemic risk?

A. Scala, V. Zlatić, G. Caldarelli, G. D’Agostino

Journal de Physique IV 225, 2017 (2016)

#risk#networks#finance

LQ placeholderCascades on a random graph

Cascades on a random graph

We use a simple model of distress propagation (the sandpile model) to show how financial systems are naturally subject to the risk of systemic failures. Taking into account possible network structures among financial institutions, we investigate if simple policies can limit financial distress propagation to avoid system-wide crises, i.e. to dampen systemic risk. We therefore compare different immunization policies (i.e. targeted helps to financial institutions) and find that the information coming from the network topology allows to mitigate systemic cascades by targeting just few institutions.

LQ placeholder

Mitigating cascades in sandpile models: an immunization strategy for systemic risk?

A. Scala, V. Zlatić, G. Caldarelli, G. D’Agostino

Journal de Physique IV

LQ placeholder

Credit default swaps networks and systemic risk

M. Puliga, G. Caldarelli, S. Battiston

Scientific Reports

LQ placeholder

Default cascades in complex networks: topology and systemic risk

T. Roukny, H. Bersini, H. Pirotte, G. Caldarelli, S. Battiston

Scientific Reports

LQ placeholder

Evolution of controllability in interbank networks

D. Delpini, S. Battiston, M. Riccaboni, G. Gabbi, F. Pammolli, G. Caldarelli

Scientific Reports

LQ placeholder

Robustness and assortativity for diffusion-like processes in scale-free networks

G. D'Agostino, A. Scala, V. Zlatić, G. Caldarelli

EPL (Europhysics Letters)

6 / 123 papers

Contribute to the future!

The London Institute is different. We’re fully dedicated to curiosity-driven research, which has shaped our present and will shape our future. But this focus comes at a cost. Unlike universities, we don’t receive student fees or subsidies, but rely entirely on grants and donations.