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The topology of interbank payment flows


  • Kimmo Soramaki
  • Morten L. Bech
  • Jeffrey Arnold
  • Robert J. Glass
  • Walter E. Beyeler


We explore the network topology of the interbank payments transferred between commercial banks over the Fedwire Funds Service. We find that the network is compact despite low connectivity. The network includes a tightly connected core of money-center banks to which all 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 attacks of September 11, 2001.

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  • Kimmo Soramaki & Morten L. Bech & Jeffrey Arnold & Robert J. Glass & Walter E. Beyeler, 2006. "The topology of interbank payment flows," Staff Reports 243, Federal Reserve Bank of New York.
  • Handle: RePEc:fip:fednsr:243

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    References listed on IDEAS

    1. Hajime Inaoka & Takuto Ninomiya & Ken Taniguchi & Tokiko Shimizu & Hideki Takayasu, 2004. "Fractal Network derived from banking transaction -- An analysis of network structures formed by financial institutions --," Bank of Japan Working Paper Series 04-E-4, Bank of Japan.
    2. James J. McAndrews & Simon M. Potter, 2002. "Liquidity effects of the events of September 11, 2001," Economic Policy Review, Federal Reserve Bank of New York, issue Nov, pages 59-79.
    3. Bernanke, Ben S, 1990. "Clearing and Settlement during the Crash," Review of Financial Studies, Society for Financial Studies, vol. 3(1), pages 133-151.
    4. Crucitti, Paolo & Latora, Vito & Marchiori, Massimo & Rapisarda, Andrea, 2004. "Error and attack tolerance of complex networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 340(1), pages 388-394.
    5. 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.
    6. M. Goldstein & S. Morris & G. Yen, 2004. "Problems with fitting to the power-law distribution," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 41(2), pages 255-258, September.
    7. Angelini, P. & Maresca, G. & Russo, D., 1996. "Systemic risk in the netting system," Journal of Banking & Finance, Elsevier, vol. 20(5), pages 853-868, June.
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    Fedwire ; Payment systems ; Electronic funds transfers ; Banking structure;

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