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Interconnectedness in the Italian financial sector: a multilayer network analysis

Author

Listed:
  • Valentina Michelangeli

    (Bank of Italy)

  • Silvia Sacco

    (IVASS)

  • Valentino Bado

    (Bank of Italy)

  • Valeria De Chiara

    (Bank of Italy)

  • Ginette Eramo

    (Bank of Italy)

  • Francesco Ficarola

    (IVASS)

  • Irene Mavilia

    (Bank of Italy)

  • Claudia Miani

    (Bank of Italy)

  • Ivan Quaglia

    (Bank of Italy)

  • Giuseppe Reale

    (Bank of Italy)

  • Francesco Sciarretta

    (IVASS)

  • Riccardo Scimone

    (Bank of Italy)

  • Laura Sigalotti

    (Bank of Italy)

Abstract

We analyse the structure and evolution of the Italian financial system over the period 2019-2025 using a multilayer network framework that captures interconnections across financial institutions and instruments. The network has a bank-centred core, with insurance companies acting as intermediate connectors and investment funds forming a broad periphery. Although the overall number of institutions remains broadly stable, sectoral dynamics diverge, as consolidations among banks and insurers are offset by the expansion of the investment fund sector. While individual layers have distinct topological characteristics, cross-sector linkages account for a growing share of total connections, underscoring their increasing role in shock transmission. Despite its sparse structure, the network exhibits small-world properties, implying a rapid contagion potential. Consolidation episodes are associated with temporary but meaningful structural shifts, while the network's overall architecture remains remarkably stable over time.

Suggested Citation

  • Valentina Michelangeli & Silvia Sacco & Valentino Bado & Valeria De Chiara & Ginette Eramo & Francesco Ficarola & Irene Mavilia & Claudia Miani & Ivan Quaglia & Giuseppe Reale & Francesco Sciarretta &, 2026. "Interconnectedness in the Italian financial sector: a multilayer network analysis," Questioni di Economia e Finanza (Occasional Papers) 1049, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_1049_26
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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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