IDEAS home Printed from https://ideas.repec.org/a/wly/jnljam/v2023y2023i1n5628621.html

Mathematical Modeling and Stability Analysis of Systemic Risk in the Banking Ecosystem

Author

Listed:
  • Irène Irakoze
  • Fulgence Nahayo
  • Dennis Ikpe
  • Samuel Asante Gyamerah
  • Frederi Viens

Abstract

This paper investigates the dynamics of systemic risk in banking networks by analyzing equilibrium points and stability conditions. The focus is on a model that incorporates interactions among distressed and undistressed banks. The equilibrium points are determined by solving a reduced system of equations, considering both homogeneous and heterogeneous scenarios. Local and global stability analyses reveal conditions under which equilibrium points are stable or unstable. Numerical simulations further illustrate the dynamics of systemic risk, while the theoretical findings offer insights into the behavior of distressed banks under varying conditions. Overall, the model enhances our understanding of systemic financial risk and offers valuable insights for risk management and policymaking in the banking sector.

Suggested Citation

  • Irène Irakoze & Fulgence Nahayo & Dennis Ikpe & Samuel Asante Gyamerah & Frederi Viens, 2023. "Mathematical Modeling and Stability Analysis of Systemic Risk in the Banking Ecosystem," Journal of Applied Mathematics, John Wiley & Sons, vol. 2023(1).
    • Handle: RePEc:wly:jnljam:v:2023:y:2023:i:1:n:5628621
    DOI: 10.1155/2023/5628621
    as

    Download full text from publisher

    File URL: https://doi.org/10.1155/2023/5628621
    Download Restriction: no
    File URL: https://libkey.io/10.1155/2023/5628621?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Abdelkader Derbali & Slaheddine Hallara, 2016. "Measuring systemic risk of Greek banks: New approach by using the epidemic model “SEIR”," Cogent Business & Management, Taylor & Francis Journals, vol. 3(1), pages 1153864-115, December.
    2. Luka Klinv{c}i'c & Vinko Zlati'c & Guido Caldarelli & Hrvoje v{S}tefanv{c}i'c, 2023. "Systemic risk measured by systems resiliency to initial shocks," Papers 2304.05794, arXiv.org.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Davit Gondauri, 2025. "Increasing Systemic Resilience to Socioeconomic Challenges: Modeling the Dynamics of Liquidity Flows and Systemic Risks Using Navier-Stokes Equations," Papers 2507.05287, arXiv.org.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tingqiang Chen & Lei Wang & Jining Wang & Qi Yang, 2017. "A Network Diffusion Model of Food Safety Scare Behavior considering Information Transparency," Complexity, Hindawi, vol. 2017, pages 1-16, December.
    2. Tian, Gang & Wang, Yumeng & Gong, Yu & Tian, Yi & Piao, Xuexu & Zhang, Tianyu, 2024. "The contagion mechanism and governance strategy of corporate social irresponsibility of Chinese food companies," Food Policy, Elsevier, vol. 122(C).
    3. Chen, Tingqiang & Wang, Jiepeng & Liu, Haifei & He, Yuanping, 2019. "Contagion model on counterparty credit risk in the CRT market by considering the heterogeneity of counterparties and preferential-random mixing attachment," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 520(C), pages 458-480.
    4. Wang, Lei & Li, Shouwei & Chen, Tingqiang, 2019. "Investor behavior, information disclosure strategy and counterparty credit risk contagion," Chaos, Solitons & Fractals, Elsevier, vol. 119(C), pages 37-49.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:jnljam:v:2023:y:2023:i:1:n:5628621. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://onlinelibrary.wiley.com/journal/4185 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.