# Reconstruction of Interbank Network using Ridge Entropy Maximization Model

@article{Ikeda2020ReconstructionOI, title={Reconstruction of Interbank Network using Ridge Entropy Maximization Model}, author={Yuichi Ikeda and Hidetoshi Takeda}, journal={arXiv: General Economics}, year={2020} }

We develop a network reconstruction model based on the entropy maximization considering the sparsity of network. Here the reconstruction is to estimate network's adjacency matrix from node's local information. We reconstruct the interbank network in Japan from financial data in balance sheets of individual banks using the developed reconstruction model in the period from 2000 to 2016. The sparsity of the interbank network is successfully reproduced in the reconstructed network. We examine the…

#### Figures and Tables from this paper

#### 2 Citations

An Interacting Agent Model of Economic Crisis

- Physics, Economics
- 2020

Most national economies are linked by international trade. Consequently, economic globalization forms a massive and complex economic network with strong links, that is, interactions arising from…

Inverse Ising techniques to infer underlying mechanisms from data

- Mathematics, Physics
- 2020

As a problem in data science the inverse Ising (or Potts) problem is to infer the parameters of a Gibbs-Boltzmann distributions of an Ising (or Potts) model from samples drawn from that distribution.…

#### References

SHOWING 1-10 OF 45 REFERENCES

The Transaction Network in Japan fs Interbank Money Markets

- Economics
- 2010

Interbank payment and settlement flows have changed substantially in the last decade. This paper applies social network analysis to settlement data from the Bank of Japan Financial Network System…

Modeling the International-Trade Network: a gravity approach

- Geography, Mathematics
- 2011

We investigate whether the gravity model (GM) can explain the statistical properties of the International Trade Network (ITN). We fit data on trade flows with a GM using alternative estimation…

The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence

- Economics
- 1985

Despite the gravity equation's empirical success in "explaining" trade flows, the model's predictive potential has been inhibited by an absence of strong theoretical foundations. A general…

Liquidity Ratios as Monetary Policy Tools: Some Historical Lessons for Macroprudential Policy

- EconomicsIMF Working Papers
- 2019

This paper explores what history can tell us about the interactions between macroprudential and monetary policy. Based on numerous historical documents, we show that liquidity ratios similar to the…

Some Historical Lessons for Macroprudential Policy”, IMF Working Paper WP/19/176, pp

- 9-11
- 2019

Macroprudential Modeling Based on Spin Dynamics in a Supply Chain Network

- Economics
- 2018

The economic crisis of 2008 showed that conventional microprudential policy to ensure the soundness of individual banks was not sufficient, and prudential regulations to cover the whole financial…

Payment Systems Worldwide: a Snapshot: Summary Outcomes of the Fourth Global Payment Systems Survey

- 2018

Reconstructing and Stress Testing Credit Networks

- Economics
- 2018

Financial networks are an important source of systemic risk, but often only partial network information is available. In this paper, we use data on bank-firm credit relationships in Japan and conduct…

Reconstruction methods for networks: The case of economic and financial systems

- Mathematics, PhysicsPhysics Reports
- 2018

When studying social, economic and biological systems, one has often access to only limited information about the structure of the underlying networks. An example of paramount importance is provided…

The case of economic and financial systems”, Physics Reports 757, pp

- 1-47
- 2018