| Bank as the core of the financial system, its stability is crucial for the entire economy. Security of the banking system is directly related to the stability of the financial system. Banks’risk has the characteristicof the strong infection; the risk of an individual may spread through a business network which resulted in contagion. With the application of the modern computer technology in the financial sector, the global financial market has become a closely connected whole. The global currency market, capital market and foreign exchange market have showed the correlation. Theemergence of this feature expands bank systemic risk spread across the different area and different market. Therefore, understanding the spreading mechanism is important for the prevention of the banking system and quick recovery from the contagion.In this paper the bank in the interbank market is seen as a node in the network and the business relationship between two banks is seen as the edges, the interbank network can be abstracted into a complex network. According to the characteristics of the real interbank market,this paper selectscale-free networks as a basis for the simulation. In the scale-free network the nodes are divided into two types:the first type called "center node", also known asimportant nodes for the system, and the newly added node is connected to the center nodes of priority. The center nodesare important for the stability of the whole network; And the second type called " non-center node", these nodes have less business relationships with other nodes. In this paper we assume that the network has 5 center nodes and 95 non-central nodes. In the next the paper constructs the bank balance sheets model, and uses matlab to simulate the related data. Finally, the paper uses 6% as the judge of the failure, and compares the impact of two different initial nodes. The results indicate the type of initial nodes is related to the impact of contagion, and thepenetration is also related to the impact.In the some special examples, the non-centernodes can also cause the failure of center nodes due to the domino effect.These conclusions are applied to the real interbank market:the five state-owned banks of China can be seen as the center node, the other commercial banks are seen as non-centernodes, five state-owned banks are critical to the stability of the whole banking system, so the regulatory authorities needto focus on the large state-owned banks, but also for small and medium commercial banks, because in some special cases they can cause systemic risk too. |
