 A review of systemic risk definition in financial systems: a special focus on network analysisHossein Dastkhan International Journal of Markets and Business Systems, 2024, vol. 5, issue 1, 43-58 Abstract: Although the complex financial markets more often lead to more social welfare in modern economic systems, they can also cause more severe failures in the case of market downturns. Accordingly, similar to other complex systems, financial markets are also exposed to systemic risks. Considering the importance of systemic risks in financial markets, we reviewed different concepts, definitions, and the related principles of the systemic risk. For this purpose, we represent a detailed review of the main characteristics of the complex systems which lead to systemic risk in different aspects. We also reviewed the main definitions of financial systemic risk in different aspects. To analyse the systemic risks in the financial markets, we introduce the main approaches of systemic risk analysis and elaborate financial network analysis as one of the main approaches. The results show that the systemic risk events can be related to the build-up of small shock on different agents in the financial systems as well as great shocks in one or a few numbers of financial agents. Keywords: network theory; systemic risk; complex systems; prudential policies; cascading failure. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ids:ijmabs:v:5:y:2024:i:1:p:43-58 Access Statistics for this article More articles in International Journal of Markets and Business Systems from Inderscience Enterprises Ltd |
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