The Network Analysis in the Funding of the Financial System

In real world, financial institutions make decisions of their funding and lending structure on the daily basis. The exchange of credits among the financial institute is so frequent and sensible to the economic environment that an increase on the reference interest rate could modify the inter-banking funding network. It results important to central authorities to be aware of the network structure and the possible implications that a monetary policy could have over the network. In this project we present the Mexican bank network structure of two financial markets (repo and inter-banking market) from July 2015 to August 2017. A static network analysis focusing on outbreak detection is performed to identify the crucial institutions that the central authorities need to monitor for potential crisis. We also study the dynamics of the network focusing on adoption of the interest rate when the reference interest rate is modified and community formation.