Robust Clustering of EU Banking Data

  • Jessica CariboniEmail author
  • Andrea Pagano
  • Domenico Perrotta
  • Francesca Torti
Conference paper
Part of the Studies in Classification, Data Analysis, and Knowledge Organization book series (STUDIES CLASS)


In this paper we present an application of robust clustering to the European union (EU) banking system. Banks may differ in several aspects, such as size, business activities and geographical location. After the latest financial crisis, it has become of paramount importance for European regulators to identify common features and issues in the EU banking system and address them in all Member States (or at least those of the Euro area) in a harmonized manner. A key issue is to identify using publicly available information those banks more involved in risky activities, in particular trading, which may need to be restructured to improve the stability of the whole EU banking sector. In this paper we show how robust clustering can help in achieving this purpose. In particular we look for a sound method able to clearly cut the two-dimensional space of trading volumes and their shares over total assets into two subsets, one containing safe banks and the other the risky ones. The dataset, built using banks’ balance sheets, includes 245 banks from all EU27 countries, but Estonia, plus a Norwegian bank. With appropriate parameters, the TCLUST routine could provide better insight of the data and suggest proper thresholds for regulators.


European Union Bayesian Information Criterion Total Asset Banking Sector Restriction Factor 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. 1.
    Atkinson, A.C., Riani M.: Exploratory tools for clustering multivariate data. Comput. Stat. Data Anal. 52, 272–285 (2007)MathSciNetCrossRefzbMATHGoogle Scholar
  2. 2.
    Atkinson, A.C., Riani, M. Cerioli, A.: Exploring Multivariate Data with the Forward Search. Springer, New York (2004)CrossRefzbMATHGoogle Scholar
  3. 3.
    Blundell-Wignall, A., Atkinson, P., Roulet, C.: Bank business models and the separation issue. OECD J. Financ. Mark. Trends 2013(2), 69–91 (2013)CrossRefGoogle Scholar
  4. 4.
    European Commission Directorate General Internal Market and Services: Reforming the structure of the EU banking sector. Consultation paper, Annex 2 (2013)Google Scholar
  5. 5.
    Fraley, C., Raftery, A.E.: Model-based clustering, discriminant analysis, and density estimation. J. Am. Stat. Assoc. 97, 611–631 (2002)MathSciNetCrossRefzbMATHGoogle Scholar
  6. 6.
    Garcia-Escudero, L.A., Gordaliza, A., Matran, C., Mayo-Iscar, A.: A general trimming approach to robust cluster analysis. Ann. Stat. 36, 1324–1345 (2008)MathSciNetCrossRefzbMATHGoogle Scholar
  7. 7.
    Garcia-Escudero, L.A., Gordaliza, A., Matran, C., Mayo-Iscar A.: A review of robust clustering methods. In: Advanced in Data Analysis and Classification, pp. 89–109. Springer, New York (2010)Google Scholar
  8. 8.
    Garcia-Escudero, L.A., Gordaliza, A., Matran, C., Mayo-Iscar, A.: Exploring the number of groups in robust model based clustering. Stat. Comput. 21(4), 585–599 (2011)MathSciNetCrossRefzbMATHGoogle Scholar
  9. 9.
    Garcia-Escudero, L.A., Gordaliza, A., Mayo-Iscar A.: A constrained robust proposal for mixture modeling avoiding spurious solutions. Adv. Data Anal. Classif. 8(1), 27–43 (2014)MathSciNetCrossRefGoogle Scholar
  10. 10.
    Riani, M., Perrotta, D., Torti, F. FSDA: a MATLAB toolbox for robust analysis and interactive data exploration. Chemometr. Intell. Lab. Syst. 116, 17–32 (2012)CrossRefGoogle Scholar

Copyright information

© Springer International Publishing Switzerland 2015

Authors and Affiliations

  • Jessica Cariboni
    • 1
    Email author
  • Andrea Pagano
    • 1
  • Domenico Perrotta
    • 2
  • Francesca Torti
    • 2
  1. 1.European Commission, Joint Research CentreInstitute for the Protection and Security of the Citizen, Financial and Economic Analysis UnitIspra siteItaly
  2. 2.European Commission, Joint Research CentreInstitute for the Protection and Security of the Citizen, Global Security and Crisis Management UnitIspra siteItaly

Personalised recommendations