Paper: arXiv 2502.15611

Abstract

The rapidly increasing availability of large amounts of granular financial data, paired with the advances of big data related technologies induces the need of suitable analytics that can represent and extract meaningful information from such data. In this paper we propose a multi-layer network approach to distill the Euro Area (EA) banking system in different distinct layers. Each layer of the network represents a specific type of financial relationship between banks, based on various sources of EA granular data collections. The resulting multi-layer network allows one to describe, analyze and compare the topology and structure of EA banks from different perspectives, eventually yielding a more complete picture of the financial market. This granular information representation has the potential to enable researchers and practitioners to better apprehend financial system dynamics as well as to support financial policies to manage and monitor financial risk from a more holistic point of view.

Complexity vs Empirical Score

  • Math Complexity: 3.5/10
  • Empirical Rigor: 7.0/10
  • Quadrant: Street Traders — practical and empirical, lighter on theory

Why this score: The paper uses established network theory concepts (e.g., degree distribution, clustering coefficient) and graph metrics without deriving new complex mathematical models, resulting in low to moderate math complexity. However, it heavily relies on real-world, granular datasets (RIAD, AnaCredit, SFTDS, etc.), details data integration and preprocessing steps, and applies these to actual Euro Area banking data for systemic risk analysis, indicating high empirical rigor.

Research Flowchart

  flowchart TD
  A["Research Goal:<br>Network Topology of Euro Area Interbank Market"] --> B["Data Source:<br>Granular EA Banking Data Collections"]
  B --> C["Methodology:<br>Multi-layer Network Approach"]
  C --> D["Computational Process:<br>Distill & Separate Financial Relationship Layers"]
  D --> E["Analysis:<br>Describe, Analyze & Compare Topology"]
  E --> F["Key Outcome:<br>Complete Picture of Financial Market"]
  F --> G["Applications:<br>Financial Stability & Risk Monitoring"]

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1 of 62 cited works are in the corpus; resolved via arXiv source bundles, Semantic Scholar and OpenAlex. Corpus-wide: 2518 linked papers.