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Topological Properties Of Bank Networks: The Case Of Brazil

Author

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  • BENJAMIN M. TABAK

    (Departamento de Economia, Universidade Catolica de Brasília, Campus II, Sala A-113, CEP 70790-160, Brasília, DF, Brazil;
    Banco Central do Brasil, Ed. Sede, SBS, Quadra 3, Bloco B, Brasília, DF 70074-900, Brazil)

  • DANIEL O. CAJUEIRO

    (Department of Economics, Universidade de Brasília, Campus Universitário, Asa Norte, 70910-900, Brasília, DF, Brazil)

  • THIAGO R. SERRA

    (Department of Economics, Universidade de Brasília, Campus Universitário, Asa Norte, 70910-900, Brasília, DF, Brazil)

Abstract

This paper investigates the topological properties of bank networks. We build the minimum spanning tree, which is based on the concept of ultrametricity, using the correlation matrix for a variety of banking variables. Empirical results suggest that the private and foreign banks tend to form clusters within the network. Furthermore, banks with different sizes are also strongly connected and tend to form clusters. These results are robust to the use of different variables to build the network, such as bank profitability, assets, equity, revenue and loans.

Suggested Citation

  • Benjamin M. Tabak & Daniel O. Cajueiro & Thiago R. Serra, 2009. "Topological Properties Of Bank Networks: The Case Of Brazil," International Journal of Modern Physics C (IJMPC), World Scientific Publishing Co. Pte. Ltd., vol. 20(08), pages 1121-1143.
    • Handle: RePEc:wsi:ijmpcx:v:20:y:2009:i:08:n:s0129183109014205
    DOI: 10.1142/S0129183109014205
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    1. ., 2006. "Physical and Social Indicators," Chapters, in: Middle East Oil Exporters, chapter 5, Edward Elgar Publishing.
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    Cited by:

    1. Gautier Marti & Frank Nielsen & Miko{l}aj Bi'nkowski & Philippe Donnat, 2017. "A review of two decades of correlations, hierarchies, networks and clustering in financial markets," Papers 1703.00485, arXiv.org, revised Nov 2020.
    2. Cajueiro, Daniel O., 2010. "Optimal navigation for characterizing the role of the nodes in complex networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(9), pages 1945-1954.
    3. Bernardo Alves Furtado & Isaque Daniel Rocha Eberhardt, 2016. "A Simple Agent-Based Spatial Model of the Economy: Tools for Policy," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 19(4), pages 1-12.
    4. Tao Xu & Jianmin He & Shouwei Li, 2016. "Multi-Channel Contagion In Dynamic Interbank Market Network," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 19(06n07), pages 1-25, September.
    5. Furtado, Bernardo Alves & Eberhardt, Isaque Daniel Rocha, 2015. "Modelo espacial simples da economia: uma proposta teórico-metodológica [A simple spatial economic model: a proposal]," MPRA Paper 67005, University Library of Munich, Germany.
    6. Xu, Tao & He, Jianmin & Li, Shouwei, 2016. "A dynamic network model for interbank market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 463(C), pages 131-138.

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