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Reengineering of interbank networks

Leventides, J., Poulios, C., Livada, M. ORCID: 0000-0002-0432-872X & Giannikos, I. (2023). Reengineering of interbank networks. Network Science, 12(1), pp. 41-64. doi: 10.1017/nws.2023.21


We investigate the reengineeering of interbank networks with a specific focus on capital increase. We consider a scenario where all other components of the network’s infrastructure remain stable (a practical assumption for short-term situations). Our objective is to assess the impact of raising capital on the network’s robustness and to address the following key aspects. First, given a predefined target for network robustness, our aim is to achieve this goal optimally, minimizing the required capital increase. Second, in cases where a total capital increase has been determined, the central challenge lies in distributing this increase among the banks in a manner that maximizes the stability of the network. To tackle these challenges, we begin by developing a comprehensive theoretical framework. Subsequently, we formulate an optimization model for the network’s redesign. Finally, we apply this framework to practical examples, highlighting its applicability in real-world scenarios.

Publication Type: Article
Additional Information: This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (, which permits unrestricted re-use, distribution and reproduction, provided the original article is properly cited.
Publisher Keywords: Decision analysis, networks, system dynamics, complexity theory
Subjects: H Social Sciences > HG Finance
Q Science > QA Mathematics
Departments: School of Science & Technology > Engineering
SWORD Depositor:
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