Systemic risk: a network approach

We propose a new measure of systemic risk based on interconnectedness, defined as the level direct and indirect links between financial institutions in correlation-based network. Deriving interconnectedness terms risk, we empirically show that within network, are strengthened during events. The relevance our is illustrated at both local global levels. Our framework offers policymakers useful toolbox for exploring real-time topology complex structure dependencies systems measuring consequences regulatory decisions.