Seminar by Michele Costola

SEMINAR ROOM - 1st FLOOR, PALAZZO LEVI CASES, VIA DEL SANTO 33 - h 01.00pm

05.12.2019

Seminar by Michele Costola, Goethe-Universität Frankfurt am Main - SAFE, Systemic Risk Lab

Title: "Financial Bridges and Network Communities" - Join with Roberto Casarin (Ca’ Foscari University of Venice) and Erdem Yenerdag (Washington University in St. Louis)

Abstract: We analyze the global financial crisis and the European sovereign debt crisis showing that the European network exhibits a strong community structure with two main blocks acting as shock spreader and receiver. We provide evidence of the prominent role played by insurances in the spread of systemic risk in both crises and demonstrate that institutions with a large number of inter-community linkages (community bridges) are more relevant in spreading contagion than institutions with large centrality. Network measures based on the community structure can provide a better description of the financial connectedness and effective early warning indicators for financial losses.