IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2607.10943.html

It Takes Two to Tango, but More to Assess Systemic Risk: Credit Networks Through the Lens of Hypergraphs

Author

Listed:
  • Federico D. Forte

Abstract

This paper provides the first analysis of credit relationships between financial institutions and firms through the lens of hypergraphs. Unlike traditional network approaches, which rely on pairwise connections, this framework explicitly represents the shared exposure of multiple financial institutions to the same firm as a simultaneous multilateral relationship. The approach is applied empirically to Credit Registry data from the Central Bank of Argentina, covering the period from August 2023 to December 2025 and focusing on commercial loans between banks and firms. Traditional centrality metrics are compared with hypergraph-specific measures to identify systemically relevant institutions. The paper also proposes an adjusted version of H-eigenvector centrality that nonlinearly weights both the centrality of neighboring institutions and each creditor's lending amount, in order to assess the relevance of a bank within the network. The systemic impact of shocking the top-ranked institutions according to each centrality metric is then estimated through an adaptation of the DebtRank algorithm. The results show that the proposed framework identifies institutions with greater shock-amplification capacity, providing a complementary tool for financial supervision and regulation.

Suggested Citation

  • Federico D. Forte, 2026. "It Takes Two to Tango, but More to Assess Systemic Risk: Credit Networks Through the Lens of Hypergraphs," Papers 2607.10943, arXiv.org.
    • Handle: RePEc:arx:papers:2607.10943
    as

    Download full text from publisher

    File URL: https://arxiv.org/pdf/2607.10943
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Marco Bardoscia & Stefano Battiston & Fabio Caccioli & Guido Caldarelli, 2015. "DebtRank: A Microscopic Foundation for Shock Propagation," PLOS ONE, Public Library of Science, vol. 10(6), pages 1-13, June.
    2. Silva, Thiago Christiano & Alexandre, Michel da Silva & Tabak, Benjamin Miranda, 2018. "Bank lending and systemic risk: A financial-real sector network approach with feedback," Journal of Financial Stability, Elsevier, vol. 38(C), pages 98-118.
    3. G. De Masi & M. Gallegati, 2012. "Bank–firms topology in Italy," Empirical Economics, Springer, vol. 43(2), pages 851-866, October.
    4. Elosegui, Pedro & Forte, Federico D. & Montes-Rojas, Gabriel, 2022. "Network structure and fragmentation of the Argentinean interbank markets," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 3(3).
    5. Martinez-Jaramillo, Serafin & Carmona, Christian U. & Kenett, Dror Y., 2019. "Interconnectedness and financial stability," Journal of Risk Management in Financial Institutions, Henry Stewart Publications, vol. 12(2), pages 168-183, March.
    Full references (including those not matched with items on IDEAS)

    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. Michel Alexandre & Thiago Christiano Silva & Francisco Aparecido Rodrigues, 2024. "Critical Edges in Financial Networks," Working Papers Series 594, Central Bank of Brazil, Research Department.
    2. Roncoroni, Alan & Battiston, Stefano & D’Errico, Marco & Hałaj, Grzegorz & Kok, Christoffer, 2021. "Interconnected banks and systemically important exposures," Journal of Economic Dynamics and Control, Elsevier, vol. 133(C).
    3. Accominotti, Olivier & Lucena-Piquero, Delio & Ugolini, Stefano, 2023. "Intermediaries’ substitutability and financial network resilience: A hyperstructure approach," Journal of Economic Dynamics and Control, Elsevier, vol. 153(C).
    4. Diaz de la Fuente Manuel, 2023. "Análisis de la Topología de las relaciones entre Bancos y Firmas mediante Redes Complejas: comparación del caso de Argentina e Italia," Asociación Argentina de Economía Política: Working Papers 4647, Asociación Argentina de Economía Política.
    5. Michel Alexandre & Thiago Christiano Silva & Colm Connaughton & Francisco A. Rodrigues, 2021. "The Role of (non-)Topological Features as Drivers of Systemic Risk: a machine learning approach," Working Papers Series 556, Central Bank of Brazil, Research Department.
    6. Michel Alexandre & Thiago Christiano Silva, 2023. "Labor Market and Systemic Risk: a network-based approach," Working Papers Series 584, Central Bank of Brazil, Research Department.
    7. Kanno, Masayasu, 2020. "Credit rating migration risk and interconnectedness in a corporate lending network," Research in International Business and Finance, Elsevier, vol. 54(C).
    8. Silva, Thiago Christiano & Guerra, Solange Maria & Tabak, Benjamin Miranda, 2020. "Fiscal risk and financial fragility," Emerging Markets Review, Elsevier, vol. 45(C).
    9. Yanquen, Eduardo & Livan, Giacomo & Montañez-Enriquez, Ricardo & Martinez-Jaramillo, Serafin, 2022. "Measuring systemic risk for bank credit networks: A multilayer approach," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 3(2).
    10. Landaberry, Victoria & Caccioli, Fabio & Rodriguez-Martinez, Anahi & Baron, Andrea & Martinez-Jaramillo, Serafin & Lluberas, Rodrigo, 2021. "The contribution of the intra-firm exposures network to systemic risk," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 2(2).
    11. Alexandre, Michel & Silva, Thiago Christiano & Connaughton, Colm & Rodrigues, Francisco A., 2021. "The drivers of systemic risk in financial networks: a data-driven machine learning analysis," Chaos, Solitons & Fractals, Elsevier, vol. 153(P1).
    12. Tabachová, Zlata & Diem, Christian & Borsos, András & Burger, Csaba & Thurner, Stefan, 2024. "Estimating the impact of supply chain network contagion on financial stability," Journal of Financial Stability, Elsevier, vol. 75(C).
    13. Alexandre, Michel & Silva, Thiago Christiano & Tabak, Benjamin Miranda, 2024. "The labor market channel of systemic risk," Journal of Economic Dynamics and Control, Elsevier, vol. 168(C).
    14. Federico Daniel Forte, 2026. "Argentina | Redes de crédito y riesgo sistémico mediante la lente de los hipergrafos [Argentina | Credit networks and systemic risk through the lens of hypergraphs]," Working Papers 26/11, BBVA Bank, Economic Research Department.
    15. Li, Shouwei & Liu, Yifu & Wu, Chaoqun, 2020. "Systemic risk in bank-firm multiplex networks," Finance Research Letters, Elsevier, vol. 33(C).
    16. Balint, T. & Lamperti, F. & Mandel, A. & Napoletano, M. & Roventini, A. & Sapio, A., 2017. "Complexity and the Economics of Climate Change: A Survey and a Look Forward," Ecological Economics, Elsevier, vol. 138(C), pages 252-265.
    17. Ramadiah, Amanah & Caccioli, Fabio & Fricke, Daniel, 2020. "Reconstructing and stress testing credit networks," Journal of Economic Dynamics and Control, Elsevier, vol. 111(C).
    18. Alessandro Ferracci & Giulio Cimini, 2021. "Systemic risk in interbank networks: disentangling balance sheets and network effects," Papers 2109.14360, arXiv.org, revised Sep 2022.
    19. Benjamin Miranda Tabak & Thiago Christiano Silva & Ahmet Sensoy, 2019. "Financial Networks 2019," Complexity, Hindawi, vol. 2019, pages 1-2, December.
    20. Abhijit Chakraborty & Tobias Reisch & Christian Diem & Pablo Astudillo-Estévez & Stefan Thurner, 2024. "Inequality in economic shock exposures across the global firm-level supply network," Nature Communications, Nature, vol. 15(1), pages 1-8, December.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:arx:papers:2607.10943. 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: arXiv administrators (email available below). General contact details of provider: https://arxiv.org/ .

    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.