Stability Analysis Of Financial System Based On Network Analysis Method

The subprime crisis has led to the bankruptcy of financial institutions,which in turn has caused serious damage to the global economy.In the report of the 19 th National Congress of the Communist Party of China,preventing and resolving major risks was placed at the top of the three major battles.Subsequently,the Financial Stability and Development Committee of the State Council was established.Preventing systemic financial risks and maintaining the stability of the financial system became the top priority of the Party and the country’s financial work.As the most important financial institution in China,commercial banks play an important role in the national economy.The direct association network formed between banks through interbank business provides a channel for the spread of systemic risk.Therefore,it is necessary to identify systemically important banks by analyzing the network structure of China’s banking system,and further analyze the stability of China’s banking system.This paper analyzes the stability of China’s financial system from the perspective of complex networks,Firstly,combines fitness model and threshold method to construct China’s interbank lending network,overcoming the problem of unavailable bilateral exposure data in the interbank market,whether there is a connection between banks depends on the characteristics of the banks themselves.Then,the topological structure of China’s interbank lending network is analyzed using relevant statistical indicators of complex networks.Based on the banking network,the systemically important banks in the banking network are characterized by network centrality.Taking into account the impact of network structure on node importance,the local degree dimension is used as a network centrality indicator to identify systemically important institutions in China’s banking system.Finally,simulate the external impact on the banking network,and measure the stability of the banking network by the magnitude of changes in network connectivity before and after the impact.By analyzing the topological structure of the interbank network in China,it was found that the interbank network has both scale-free and small world characteristics.As time goes by,the interbank lending relationships in the interbank market are increasing,and the debt relationships between banks in the system become more closely related.Based on the interbank network structure,identify systemically important banks and identify the top ten "most important" banks in China’s banking system,which is basically consistent with the evaluation results of the People’s Bank of China.The stability analysis results indicate that under static conditions,the banking system tends to be stable.In the face of external shocks,the closer the debt relationship between banks,the higher the degree of collectivization,and the more unstable the banking network.