A Research On The Stability Of Interbank Lending Network

Almost every country has not spared when faced with global financial crisis in 2008.On the eve of this crisis,many financial instruments were designed to optimize individual institutions and reduce risks.After the financial crisis,more and more people began to consider the entire financial system at the system level,rather than just paying attention to a single financial institution in the past.Banks linked closely increase the possibility of instablity.Large funds flow between banks provide smooth channels,but exposure makes potential systemic risks to the bank system.Therefore,the stability of inter-bank lending network is the main research object in this paper.In this paper,we use the theory of complex network to research,matrix method is used to build the interbank funding network model and simulation,we analyzed network stability under the state of static and dynamic environment with external shocks.At the same time,according to the data of China's inter-bank lending market,this paper analyzes the current inter-bank lending network in China,and makes an empirical study on the partial inter-bank lending network.Finally,based on the above conclusions,the relevant policy Suggestions are given from the bank main body and the regulatory level respectively.The research results show that neighbor number and average strength have impacts on the stability of the interbank lending network,increase of them will make the network to instability.When the peripheral nodes are vulnerable to external shocks,robustness is not sufficient to support the health of the network.Random attacks are more stable than deliberate attacks,but when nodes is exposed to central part of network is under pressure,the stability of the network will suffer greatly.The empirical results show that China's inter-bank lending network has the characteristics of high correlation and high circulation efficiency,which leads to high risk hidden danger and instability.Especially in face of external shocks,the ability to resist stability is weak.