?url_ver=Z39.88-2004&rft_id=arXiv%3A1602.05883&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Adc&rft.relation=http%3A%2F%2Feprints.imtlucca.it%2F3550%2F&rft.title=Pathways+towards+instability+in+financial+networks&rft.creator=Bardoscia%2C+Marco&rft.creator=Battiston%2C+Stefano&rft.creator=Caccioli%2C+Fabio&rft.creator=Caldarelli%2C+Guido&rft.subject=QC+Physics&rft.description=There+is+growing+consensus+that+processes+of+market+integration+and+risk+diversification+may+come+at+the+price+of+more+systemic+risk.+Indeed%2C+financial+institutions+are+interconnected+in+a+network+of+contracts+where+distress+can+either+be+amplified+or+dampened.+However%2C+a+mathematical+understanding+of+instability+in+relation+to+the+network+topology+is+still+lacking.+In+a+model+financial+network%2C+we+show+that+the+origin+of+instability+resides+in+the+presence+of+specific+types+of+cyclical+structures%2C+regardless+of+many+of+the+details+of+the+distress+propagation+mechanism.+In+particular%2C+we+show+the+existence+of+trajectories+in+the+space+of+graphs+along+which+a+complex+network+turns+from+stable+to+unstable%2C+although+at+each+point+along+the+trajectory+its+nodes+satisfy+constraints+that+would+apparently+make+them+individually+stable.+In+the+financial+context%2C+our+findings+have+important+implications+for+policies+aimed+at+increasing+financial+stability.+We+illustrate+the+propositions+on+a+sample+dataset+for+the+top+50+EU+listed+banks+between+2008+and+2013.+More+in+general%2C+our+results+shed+light+on+previous+findings+on+the+instability+of+model+ecosystems+and+are+relevant+for+a+broad+class+of+dynamical+processes+on+complex+networks.&rft.publisher=arXiv&rft.date=2016&rft.type=Working+Paper&rft.type=NonPeerReviewed&rft.format=application%2Fpdf&rft.language=en&rft.rights=cc_by_nc&rft.identifier=http%3A%2F%2Feprints.imtlucca.it%2F3550%2F1%2F1602.05883v1.pdf&rft.identifier=++Bardoscia%2C+Marco+and+Battiston%2C+Stefano+and+Caccioli%2C+Fabio+and+Caldarelli%2C+Guido++Pathways+towards+instability+in+financial+networks.++Working+Paper+++arXiv+++++++(Submitted)+++&rft.relation=https%3A%2F%2Farxiv.org%2Fabs%2F1602.05883&rft.relation=arXiv%3A1602.05883