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The topology of interbank payment flows

Author

Listed:
  • Soramäki, Kimmo
  • Bech, Morten L.
  • Arnold, Jeffrey
  • Glass, Robert J.
  • Beyeler, Walter E.

Abstract

We explore the network topology of the interbank payments transferred between commercial banks over the Fedwire® Funds Service. We find that the network has both a low average path length and low connectivity. The network includes a tightly connected core of banks to which most other banks connect. The degree distribution is scale free over a substantial range. We find that the properties of the network changed considerably in the immediate aftermath of the events of September 11, 2001.

Suggested Citation

  • Soramäki, Kimmo & Bech, Morten L. & Arnold, Jeffrey & Glass, Robert J. & Beyeler, Walter E., 2007. "The topology of interbank payment flows," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 379(1), pages 317-333.
  • Handle: RePEc:eee:phsmap:v:379:y:2007:i:1:p:317-333
    DOI: 10.1016/j.physa.2006.11.093
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    References listed on IDEAS

    as
    1. Lacker, Jeffrey M., 2004. "Payment system disruptions and the federal reserve following September 11, 2001," Journal of Monetary Economics, Elsevier, vol. 51(5), pages 935-965, July.
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