An Optimizing Strategy Based on Resource Competing Coupling Model in Interbank Risk Contagion

Abstract

In interbank networks, creditor banks tend to gain appreciation in asset value by borrowing liquid assets to debtor banks. Meanwhile, funds shortage leads debtor banks competing for the liquid asset, which forms a typical resource competing coupling relationship that affects the whole system. Existing research on interbank risk contagion mainly under the hypothesis that systemic risk in interbank network has accumulated to the threshold, so the behavior of banks in the accumulate process is regarded as static. it ignores the active behavior that derived from resource competing between banks. Therefore, this paper proposes a novel coupling relationship based on resource competing between banks, which takes the liquid assets as constraint, aimed to find proper ways to allocation liquid assets of creditor banks. We further study the influence of resource competing on the risk contagion of interbank network. Then, a network resource optimizing strategy is proposed to control the risk under different initial conditions.