IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v101y2019icp70-82.html
   My bibliography  Save this article

Resilience of United Kingdom financial institutions to major uncertainty: A network analysis related to the Credit Default Swaps market

Author

Listed:
  • Chabot, Miia
  • Bertrand, Jean-Louis
  • Thorez, Eric

Abstract

The banking sector plays an important role in the UK economy as a whole, and investors are increasingly concerned about the ability of UK-based banks to withstand the consequences of major uncertainty such as the Brexit. This paper investigates the UK financial system resilience using networks of relationships related to the Credit Default Swap market. We propose a detailed descriptive analysis of the topology of the networks, and characterize the nature of relationships between financial institutions. We compare our results with theoretical network configurations (small-worlds, preferential attachments, etc.) to reveal the connection dynamics of the networks we identify. We then develop a panel analysis including variables of centrality and influence of banks in their networks. We identify prominent banks and groups of banks that could disrupt the system. Our results help identify priority areas of action by regulators and risk managers.

Suggested Citation

  • Chabot, Miia & Bertrand, Jean-Louis & Thorez, Eric, 2019. "Resilience of United Kingdom financial institutions to major uncertainty: A network analysis related to the Credit Default Swaps market," Journal of Business Research, Elsevier, vol. 101(C), pages 70-82.
    • Handle: RePEc:eee:jbrese:v:101:y:2019:i:c:p:70-82
    DOI: 10.1016/j.jbusres.2019.04.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296319302450
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2019.04.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tang, Chun & Liu, Xiaoxing & Zhou, Donghai, 2022. "Financial market resilience and financial development: A global perspective," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 80(C).
    2. Yfanti, Stavroula & Karanasos, Menelaos & Zopounidis, Constantin & Christopoulos, Apostolos, 2023. "Corporate credit risk counter-cyclical interdependence: A systematic analysis of cross-border and cross-sector correlation dynamics," European Journal of Operational Research, Elsevier, vol. 304(2), pages 813-831.
    3. Hao Dong & Tao Li, 2023. "Climate Economics and Finance: A Literature Review," Climate Economics and Finance, Anser Press, vol. 1(1), pages 29-45, November.
    4. Marwa Sallemi & Salah Ben Hamad & Nejla Ould Daoud Ellili, 2023. "Executive compensation and bank’s stability: which role of the corruption control? An empirical evidence from OECD banks," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(2), pages 457-477, June.
    5. Braun, Erik & Zenker, Sebastian, 2022. "In governments we trust: A two-country Brexit field experiment on perceived uncertainty as mediator for consumer decisions," Journal of Business Research, Elsevier, vol. 138(C), pages 335-346.
    6. Xiaohui Chen & Yiqing He, 2022. "The Impact of Financial Resilience and Steady Growth on High-Quality Economic Development—Based on a Heterogeneous Intermediary Effect Analysis," Sustainability, MDPI, vol. 14(22), pages 1-19, November.
    7. Doriana Cucinelli & Paola Schwizer & Maria Gaia Soana, 2023. "Brexit and the Banking Sector: The Stock Market Reaction of UK and European Banks," International Journal of Business and Management, Canadian Center of Science and Education, vol. 16(4), pages 1-27, February.

    More about this item

    Keywords

    Networks; CDS spreads; Prominence analysis; Brexit;
    All these keywords.

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:101:y:2019:i:c:p:70-82. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.