Bank Network Analysis in the ECCU

By Balazs Csonto, Alejandro D Guerson, Alla Myrvoda, Emefa Sewordor

July 12, 2018

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Balazs Csonto, Alejandro D Guerson, Alla Myrvoda, and Emefa Sewordor. Bank Network Analysis in the ECCU, (USA: International Monetary Fund, 2018) accessed December 22, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper applies network analysis to assess the extent of systemic vulnerabilities in the ECCU banking system. It includes two sets of illustrative stress tests. First, solvency and liquidity shocks to each individual bank and the impact on other banks in the network through their biltareal net asset exposures. Second, country and region-wide tail shocks to GDP affecting capital and liquidity of all banks in the shocked jurisdictions, followed by the rippling effects through the regional network. The results identify systemic institutions that merit hightened attention by the regulator, as determined by the degree of connectivity with the rest of the system, and the extent to which they are vulnerable to the failure of other banks.

Subject: Banking, Commercial banks, Credit, Distressed institutions, Financial institutions, Financial regulation and supervision, Market risk, Money, Nonperforming loans

Keywords: Asset, Bank, Bank assets, Bank capital, Bank exposure, Bank institution, Bank network analysis, Capital, Commercial banks, Credit, Creditor bank, Defaulted claim, Distressed institutions, ECCU, ECCU bank, F34, G21, Global, Incorporated bank, Liquidity holding, Market risk, Nonperforming loans, Portfolios diversification opportunity, Remains high, WP

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/162
Stock No:

WPIEA2018162
ISBN:

9781484367506
ISSN:

1018-5941

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