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Mapping the UK interbank system

Author

Listed:
  • Langfield, Sam
  • Liu, Zijun
  • Ota, Tomohiro

Abstract

We present new evidence on the structure of interbank connections across key markets: derivatives, marketable securities, repo, unsecured lending and secured lending. Taken together, these markets comprise two networks: a network of interbank exposures and a network of interbank funding. Network structure varies across and within these two networks, for reasons related to markets’ different economic functions. Credit risk and liquidity risk therefore propagate in the interbank system through different network structures. We discuss the implications for financial stability.

Suggested Citation

  • Langfield, Sam & Liu, Zijun & Ota, Tomohiro, 2014. "Mapping the UK interbank system," Journal of Banking & Finance, Elsevier, vol. 45(C), pages 288-303.
    • Handle: RePEc:eee:jbfina:v:45:y:2014:i:c:p:288-303
    DOI: 10.1016/j.jbankfin.2014.03.031
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    More about this item

    Keywords

    Interbank markets; Core-periphery; Intermediation; Financial networks; Market microstructure;
    All these keywords.

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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