iConViz: Interactive Visual Exploration of the Default Contagion Risk of Networked-Guarantee Loans

Zhibin Niu, Runlin Li, Junqi Wu, Dawei Cheng and Jiawan Zhang

Papers from arXiv.org

Abstract: Groups of enterprises can serve as guarantees for one another and form complex networks when obtaining loans from commercial banks. During economic slowdowns, corporate default may spread like a virus and lead to large-scale defaults or even systemic financial crises. To help financial regulatory authorities and banks manage the risk associated with networked loans, we identified the default contagion risk, a pivotal issue in developing preventive measures, and established iConVis, an interactive visual analysis tool that facilitates the closed-loop analysis process. A novel financial metric, the contagion effect, was formulated to quantify the infectious consequences of guarantee chains in this type of network. Based on this metric, we designed and implement a series of novel and coordinated views that address the analysis of financial problems. Experts evaluated the system using real-world financial data. The proposed approach grants practitioners the ability to avoid previous ad hoc analysis methodologies and extend coverage of the conventional Capital Accord to the banking industry.

Date: 2020-06, Revised 2020-08
New Economics Papers: this item is included in nep-ban, nep-net and nep-rmg
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Citations: View citations in EconPapers (3)

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