Complex links among financial market participants and institutions are typical in the modern global financial system. For this reason, research that highlights ways in which network structure influences the financial system can improve the understanding of its behaviour. This will clearly impact the way to address important questions involving the structure of control chains in financial systems and the systemic risk associated with them.
This project addresses the use of random graph theory to analyse the behaviour of financial networks. The use of random graph models in financial systems has exploded recently, in particular after the financial crisis of 2008-2009. The great interest in such theory is due to the fact that although financial institutions and markets are highly interconnected, these network structures had largely been disregarded in both economic theory and in the calibration of the concrete models applied by the financial institutions.