The Cross-industry Contagion Network Of Systemic Risk

The outbreak of systemic risk will cause huge losses to the economic system.Therefore,since the 19 th National Congress of the Communist Party of China,“resolutely fighting against and resolving major risks including systemic risk” and “grasping the key point of preventing systemic risk,promoting the high-quality development of the financial industry” and“resolutely holding the bottom line that systemic risk do not occur” have become extremely important aspects of the country’s multiple work priorities,and it is imperative to have a deep grasp of the contagious nature of systemic risk.The ever-increasing connection between the real economy and the financial industry provides a channel for systemic risk to spread between the financial industry and the real economy.It is difficult to meet the requirements for prevention and control of systemic risks simply by taking the financial industry as the research object of systemic risk infections.Only when the real economy is included in the research scope of systemic risk contagion can we grasp the characteristics of systemic risk contagion and maintain the bottom line of preventing systemic risk.Based on the above issues,this article studies the following: Firstly,it introduces the concept and basic types of complex networks,and defines the concepts and characteristics of dynamic complex networks,complex network community structures,and systemic risk.At the same time,this paper analyzes the mechanism of systemic risk contagion between the financial industry and the real economy,and describes the development status and risk causes of the financial industry and the real economy,which laying a theoretical foundation for the following article.Secondly,this article analyzes the applicability of dynamic complex networks to study systemic risk.Lasso-Granger algorithm,sliding window technology and Bootstrap method are used to construct a dynamic complex network.The out-degree and in-degree of the financial industry,the out-degree and in-degree ranking of the real economy to the financial industry,and the betweenness of the financial industry and the centrality and complex network community structure are analyzed.Finally,the interrelationship between stocks is used to predict the stock price index,and the systemic risk dynamic contagion network is constructed based on the predicted the stock price index,and the financial industry’s out-degree and in-degree and betweenness centrality and the community structure of a complex network to predict the contagion of systemic risks are analyzed.The research results show that,first of all,in the financial industry,the insurance industry spreads the most systemic risk to other industries,followed by the securities industry,the banking industry spreads the least systemic risk to other industries;the insurance industry has received the most systemic risk,the banking industry is the second place,and the securities industry has received the least most systemic.Moreover,the risk contagion relationship between different real economy and financial industry is different.Secondly,the insurance industry has the strongest intermediary role in the process of systemic risk contagion,followed by the banking industry,and the securities industry is the weakest.And with different economic development conditions,there are differences in the betweenness centrality of the financial industry.Thirdly,according to the final result of the community structure,the banking industry and the insurance industry have the same role attributes,while the securities industry is often independent of other industries during economic crisis,and the role played by it is irreplaceable.During the stable operation of the economy,the role attributes of securities industry are same as the real economy.According to the results of the research,countermeasures were proposed from two aspects:the control of risk contagion in the financial industry and the real economy.For the financial industry,it is necessary to establish an effective financial industry risk warning mechanism,improve macro-prudential management framework and risk management system,encourage multiple capital replenishment methods,unblock capital circulation channels,and enhance the financial industry’s ability to resist risks.For the real economy,it is necessary to optimize the credit structure of the financial industry to the real economy,and grant credits according to the credit status of real enterprises to improve the quality of the development of the real economy.