Advertisement

Rethinking the financial network

  • Andrew G Haldane
Chapter
Part of the zu | schriften der Zeppelin Universität book series (zszuzwkp)

Zusammenfassung

On 16 November 2002, the first official case of Severe Acute Respiratory Syndrome (SARS) was recorded in Guangdong Province, China. Panic ensued. Uncertainty about its causes and contagious consequences brought many neighbouring economies across Asia to a standstill. Hotel occupancy rates in Hong Kong fell from over 80 % to less than 15 %, while among Beijing’s 5-star hotels occupancy rates fell below 2 %.

References

  1. Akerlorf, G, and Shiller, R (2009), ‘Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism’, Princeton University Press.Google Scholar
  2. Albert, R, Albert, I and Nakarado, G.L (2004), ‘Structural vulnerability of the North American power grid’, arXiv:condmat/040107v1.Google Scholar
  3. Albert, R, Jeong H and Barabasi, A-L (2000), ‘Attack and error tolerance of complex network’, Nature, Vol. 406: 379–382.CrossRefGoogle Scholar
  4. Allen, F and Gale, D (2000), ‘Financial Contagion’, Journal of Political Economy 108(1) 1–33.CrossRefGoogle Scholar
  5. Battiston, S, Gatti, D. D, Gallegati, M, Greenwald, B.C.N. and Stiglitz, J.E. (2009), ‘Liasons Dangereuses: Increasing Connectivity, Risk Sharing, and Systemic Risk’. Working Paper.Google Scholar
  6. Bowtell, W (2005), ‘Australia’s response to HIV/AIDS 1982-2005’, Lowy Institute for International Policy.Google Scholar
  7. Bowtell, W (2007), ‘HIV/AIDS: The looming Asia Pacific Pandemic’, Lowy Institute for International Policy.Google Scholar
  8. Brunnermeier, M, Crockett, A, Goodhart, C, Persaud, A.D and Shin, H. (2009), ‘The fundamental principles of financial regulation’, Geneva Reports on the World Economy 11.Google Scholar
  9. Carlson, J.M and Doyle, J (1999), ‘Highly optimized tolerance: A mechanism for power laws in designed systems’, Phys. Rev. E 60: 1412–1427.Google Scholar
  10. Clay, J (2004), ‘World Agriculture and the Environment: A commodity-by- commodity guide to impacts and practices’, Washington (DC): Island Press.Google Scholar
  11. Corrigan, E.G (1987), ‘Financial Market Structure: A Longer View’, Federal Reserve Bank of NewGoogle Scholar
  12. York. de Larosière, J (2009), ‘Report’, The high-level group on financial supervision in the EU, available at ec.europa.eu/internal_market/finances/docs/de_larosiere_report_en.pdf.Google Scholar
  13. Elton, C.S (1958), ‘The Ecology of Invasions by Animals and Plants’, Methuen.Google Scholar
  14. Epstein, J.M, Parker, J, Cummings, D, and Hammond, R (2008), ‘Coupled contagion dynamics of fear and disease: Mathematical and computational explorations’, PLoS ONE, Vol. 3, Issue 12: 1–11.CrossRefGoogle Scholar
  15. Federal Reserve Bank of New York (2007), ‘New Directions for Understanding Systemic Risk’, FRBNY Economic Policy Review, Vol. 13, No. 2.Google Scholar
  16. Gai, P and Kapadia, S (2008), ‘Contagion in Financial Networks’, mimeo, Bank of England.Google Scholar
  17. Gallegati, M, Greenwald, B, Richiardi, M and Stiglitz, J (2008), ‘The Asymmetric Effect of Diffusion Processes: Risk Sharing and Contagion’, Global Economy Journal, Vol 8, Issue 3.Google Scholar
  18. Galvani, A.P and May, R.M (2005), ‘Dimensions of superspreading’, Nature, Vol. 438: 293–296.CrossRefGoogle Scholar
  19. Haldane, A (2009), ‘Why Banks Failed the Stress Test’, available at http://www.bankofengland.co.uk/publications/speeches/2009/speech374.pdf.
  20. Kelling, M.J, Woolhouse, M.E.J, May, R.M and Grenfell, B.T (2003), ‘Modelling vaccination strategies against food-and-mouth disease’, Nature, Vol. 421: 136–142.CrossRefGoogle Scholar
  21. King, M (2008), Speech to the CBI dinner, Nottingham, Tuesday 20 January 2009, available at http://www.bankofengland.co.uk/publications/speeches/2009/ speech372.pdf.
  22. Kinney, R, Crucitti, P, Albert, R and Latora, V (2005), ‘Modeling Cascading Failures in the North American Power Grid’, The European Physics Journal, B 46 (2005) 101. Google Scholar
  23. Kubelec, C and Sa, F (2009), ‘The Geographical Composition of National External Balance Sheets: 1980-2005’, Bank of England Working Paper (forthcoming).Google Scholar
  24. Lee, S.H, Kim, P-J and Jeong, H (2006), ‘Statistical properties of sampled networks’, Physical Review, Vol.73.Google Scholar
  25. Levin, S and Lubchenco, J (2008), ‘Resilience, Robustness, and Marine Ecosystem- based Management’, Bioscience Vol. 58: 27–32.CrossRefGoogle Scholar
  26. Lloyd-Smith J.O, Schreiber S.J, Kopp, P.E and Getz, W.M (2005), ‘Superspreading and the impact of individual variation on disease emergence’. Nature 438, 355–9.CrossRefGoogle Scholar
  27. May, R.M (1974), ‘Stability and Complexity in Model Ecosystems’, Princeton University Press.Google Scholar
  28. May, R.M (2006), ‘Network structure and the biology of populations’, Trends in Ecology and Evolution Vol. 27, No. 7.Google Scholar
  29. May, R.B and Anderson, R.M (1991), ‘Infectious Diseases of Humans’, Oxford University Press.Google Scholar
  30. May, R, Levin, S.A and Sugihara, G (2008), ‘Complex systems: Ecology for bankers’, Nature Vol. 451: 893-895.CrossRefGoogle Scholar
  31. McKercher, B and Chon, K (2004), ‘The over-reaction to SARS and the collapse of Asian tourism’, Annals of Tourism Research 31(3): 716-719.CrossRefGoogle Scholar
  32. Milgram, S (1967), ‘Small-world problem’, Psychology Today 1(1): 61-67.Google Scholar
  33. Newman, M (2003), ‘The structure and function of complex systems’, arXiv:cond- mat/0303516v1.Google Scholar
  34. Newman, M (2008), ‘The physics of networks’, Physics Today: 33–38.Google Scholar
  35. Nier, E, Yang, J, Yorulmazer, T and Alentorn, A (2008), ‘Network Models and Financial Stability’, Bank of England Working Paper No.346.Google Scholar
  36. NYU Stern School of Business (2008), Repairing the US Financial Architecture: An Independent View.Google Scholar
  37. Pikitch, E.K, Santora, C , Babcock, E.A, Bakun, A, Bonfil, R, Conover, D.O, Dayton, P, Doukakis, P, Fluharty, D, Heneman, B, Houde, E.D, Link, J, Livingston, P.A, Mangel, M McAllister, M.K, Pope, J and Sainsbury, K.J (2004), ‘Ecosystem-Based Fishery Management’, Science Magazine, Vol. 305: 346–347.Google Scholar
  38. Porterie, B, Kaiss, A, Clerc, J-P and Zekri, L and Zekri, N (2008), ‘Universal scaling of forest fire propagation’, eprint arXiv:0805.3365.Google Scholar
  39. President’s Working Group (2008), Initiatives to strengthen OTC derivatives oversight and infrastructure, available at http://www.ustreas.gov/press/releases/hp1272.htm.
  40. Pröpper, M, van Lelyveld, I and Heijmans, R (2008), ‘Towards a network description of interbank payment flows’, DNB Working Paper No. 177.Google Scholar
  41. Simon, H (1962), ‘The architecture of complexity’, Proceedings of the American Philosophical Society, Vol. 106, No. 6: 467–482.Google Scholar
  42. Smith, R.D (2006), ‘Responding to global infectious disease outbreaks: Lessons from SARS on the role of risk perception, communication and management’, Journal of Social Science and Medicine, 63, 3113-3123.CrossRefGoogle Scholar
  43. Tilman, D (1999), ‘The ecological consequences of changes in biodiversity: A search for general principles’, Ecological Society of America, Vol. 80, No. 5: 1455–1474.Google Scholar
  44. Voute, A.D (1946), ‘Regulation of the density of the insect populations in virgin forests and cultivated woods’, Archives Neerlandaises de Zoologie, 7, 435-470.CrossRefGoogle Scholar
  45. Watts, D (2002), ‘A simple model of global cascades on random networks’, Proceedings of the National Academy of Sciences 9: 5766–5771.Google Scholar
  46. Watts, D.J and Strogatz, S.H (1998), ‘Collective dynamics of ‘small-world’ networks’, Nature 393 (6684): 409–10.CrossRefGoogle Scholar
  47. Wheelis, M (2002), ‘Biological warfare at the 1346 Siege of Caffa’, Emerging Infectious Diseases, Vol. 8, No.9.Google Scholar
  48. Worm, B, Barbier, E.B, Beaumont, N, Emmett Duffy, Folke C, Halpern, B.S, Jackson, J.B.C, Lotze, H.K, Micheli, F, Palumbi, S.R, Sala, E, Selkoe, K.A and Stachowicz, J.J (2006), ‘Impacts of biodiversity loss on ocean ecosystem services’, Science, Vol. 314: 787–790.CrossRefGoogle Scholar

Copyright information

© Springer Fachmedien Wiesbaden 2013

Authors and Affiliations

  • Andrew G Haldane
    • 1
  1. 1.LondonUK

Personalised recommendations