Nestedness in the Brazilian Financial System

Michel Alexandre, Felipe Xavier, Thiago Silva () and Francisco Rodrigues

No 566, Working Papers Series from Central Bank of Brazil, Research Department

Abstract: In this paper, we assess the nestedness in the Brazilian financial system. We rely on data from two Brazilian financial networks: the bank-firm credit network and the interbank network. We computed the nestedness of the networks, as well as the Individual Nestedness Contribution (INC) for each node. The analysis of the determinants of the INC shows lenders – in both networks – have their INC mainly determined by the degree, while the INC of borrowers has not a clear main determinant. Moreover, we found nodes with a higher INC would cause more damage to the network if they were hit by a shock, but are not necessarily those more vulnerable to shocks on the network.

Date: 2022-09
New Economics Papers: this item is included in nep-ban, nep-net and nep-pay
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