Privacy-Preserving Network Analytics

Marcella Hastings (), Brett Hemenway Falk () and Gerry Tsoukalas ()
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Marcella Hastings: Department of Computer and Information Science, University of Pennsylvania, Philadelphia, Pennsylvania 19104; Bolt Labs, Inc, Baltimore, Maryland 21215
Brett Hemenway Falk: Department of Computer and Information Science, University of Pennsylvania, Philadelphia, Pennsylvania 19104
Gerry Tsoukalas: Questrom School of Business, Boston University, Boston, Massachusetts 02215

Management Science, 2023, vol. 69, issue 9, 5482-5500

Abstract: We develop a new privacy-preserving framework for a general class of financial network models, leveraging cryptographic principles from secure multiparty computation and decentralized systems. We show how aggregate-level network statistics required for stability assessment and stress testing can be derived from real data without any individual node revealing its private information to any outside party, be it other nodes in the network, or even a central agent. Our work bridges the gap between established theories of financial network contagion and systemic risk that assume agents have full network information and the real world where information sharing is hindered by privacy and security concerns.

Keywords: contagion; data privacy; financial networks; financial regulation; financial technologies; secure multiparty computation (MPC); network reconstruction; privacy preservation; stress testing; systemic risk (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:69:y:2023:i:9:p:5482-5500

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