Dynamic Analysis of the Global Financial Network

Abstract

Using the consolidated banking statistics (CBS) on foreign claims over the period 2005-2020, we examine the relationship between national banking systems from the network perspective. Our main goal is to identify financial communities and systemically important elements and study their evolution. We compare the snapshots of the foreign claims network and analyze how it changes over time for various centrality measures and community structure of the network. As a result, we identify the most important participants of the global financial system, which are the major players with high ratings and positive credit history or intermediary players, which have a great scale of financial activities. Finally, we perform hierarchical clustering of the snapshots to reveal the main changes in the international lending process.