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At the core of the international financial system

Author

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  • Valentina Feroldi
  • Edoardo Gaffeo

    ()

Abstract

This paper o§ers additional evidence on the structure of the international financial network as emerging from the Coordinated Portfolio Investment Survey (CPIS) dataset collected by the IMF. Making use of blockmodeling techniques which allow us to Öt a given community partition to real data, we show that the system is characterized by the presence of a particular type of meso-scale structure known as core-periphery, in which a densely connected subset of nodes (core) coexists with a sparsely connected partition (periphery), while the members of the core act as intermediaries between members of the periphery. The composition of the core - whose constituents are identiÖed as the set of systemically- important international Önancial centers - is rather small and remains stable over time. In addition to very large economies playing host to well-known global Önancial centers, the core comprises several o§-shore Önancial markets.

Suggested Citation

  • Valentina Feroldi & Edoardo Gaffeo, 2013. "At the core of the international financial system," DEM Discussion Papers 2013/05, Department of Economics and Management.
  • Handle: RePEc:trn:utwpem:2013/05
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    References listed on IDEAS

    as
    1. Claessens, Stijn & Kingebiel, Daniela & Schmukler, Sergio L., 2002. "Explaining the Migration of Stocks from Exchanges in Emerging Economies to International Centres," WIDER Working Paper Series 094, World Institute for Development Economic Research (UNU-WIDER).
    2. Kiminori Matsuyama, 2004. "Financial Market Globalization, Symmetry-Breaking, and Endogenous Inequality of Nations," Econometrica, Econometric Society, vol. 72(3), pages 853-884, May.
    3. Andrew P. Morriss, 2010. "Offshore Financial Centers and Regulatory Competition," Books, American Enterprise Institute, number 50375.
    4. Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2007. "The external wealth of nations mark II: Revised and extended estimates of foreign assets and liabilities, 1970-2004," Journal of International Economics, Elsevier, vol. 73(2), pages 223-250, November.
    5. Sheri M. Markose, 2012. "Systemic Risk from Global Financial Derivatives; A Network Analysis of Contagion and Its Mitigation with Super-Spreader Tax," IMF Working Papers 12/282, International Monetary Fund.
    6. repec:aei:rpbook:24894 is not listed on IDEAS
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    More about this item

    Keywords

    International financial system; intermediation; network analysis;

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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