Proceedings of the 2023 International Conference on Finance, Trade and Business Management (FTBM 2023)

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Analysis of the Contagion of Financial Risks in Complex Financial Networks

Authors
Min Liu1, *, Rongrong Xu1
1Jinan University, Guangzhou, 510632, China
*Corresponding author. Email: liumin@stu2019.jnu.edu.cn
Corresponding Author
Min Liu
Available Online 30 November 2023.
DOI
10.2991/978-94-6463-298-9_55How to use a DOI?
Keywords
Complex Network; Scale-free Network Model; Financial Risk Contagion; Propagation Dynamics Models
Abstract

Analysis for the area of complex networks and their applications to economics and finance is an important area of current research in finance. This paper carries out mathematical modelling of the financial system, aiming to study the contagion process of financial risk and to investigate the contagion effect of financial risk. It also analyses the subjects and paths in the process of financial risk contagion. Firstly, the paper abstracts the financial system as a financial network with scale-free nature. Based on the traditional SIRS virus contagion dynamics model, the financial risk contagion model (SIRD model) is built by adding bankruptcy nodes and bankruptcy rate parameters, which is in conjunction with the characteristics of the actual financial system. Then simulations are carried out to analyze the effects of risk propagation rate, recovery rate, resistance failure rate and bankruptcy rate on the steady state results in the model respectively. Finally, based on the simulation results, the characteristics of financial risk contagion under different scenarios are discussed, and the nature of financial risk contagion is summarized and suggestions are given.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2023 International Conference on Finance, Trade and Business Management (FTBM 2023)
Series
Advances in Economics, Business and Management Research
Publication Date
30 November 2023
ISBN
978-94-6463-298-9
ISSN
2352-5428
DOI
10.2991/978-94-6463-298-9_55How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Min Liu
AU  - Rongrong Xu
PY  - 2023
DA  - 2023/11/30
TI  - Analysis of the Contagion of Financial Risks in Complex Financial Networks
BT  - Proceedings of the 2023 International Conference on Finance, Trade and Business Management (FTBM 2023)
PB  - Atlantis Press
SP  - 507
EP  - 519
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-298-9_55
DO  - 10.2991/978-94-6463-298-9_55
ID  - Liu2023
ER  -