Financial Networks Research Articles

Quantitative Studies on Hacking Methods and Types of Cyber-Attackers of Electronic Banking Networks

Cyber-attacks on electronic banking networks are a growing concern in today's digital age. Cybercriminals try to penetrate the Electronic Banking infrastructure, by bypassing all protection mechanisms, and the media continue to report new bank cyberattacks and thefts. The study attempts to identify the impact of attacks and methods that threaten bank networks. To know the kinds and methods of the attackers of bank networks, a questionnaire was prepared and distributed to the selected banks and their branches, namely Omdurman National Bank, Bank of Khartoum, and Bank of Sudan. From the studied sample, competitors stood out as the most qualitative network attackers on the banks, while penetration through the Internet was one of the ways through which the attacks on the financial banks networks could be carried out. The sample of the study showed that the quality of bank attackers are the competitors, with a rate of 29.2%, which is considered the largest percentage of all assumptions and the highest network attacker’s method Through the internet with a rate of 52.7%. The study concluded that Competitors and Internet have highest impact per methods and kinds of attacks respectively. This conclusion supports the problem statement since the impact was known within the case study Banks.

The systemic risk of leveraged and covenant-lite loan syndications

By modelling the whole U.S. syndicated loan market as a financial network from 2000 to 2022, we find that highly connected institutions hold significant shares of leveraged and covenant-lite loans. Our analysis indicates that the size of leveraged and covenant- lite syndicated loan portfolios increases financial institutions' systemic risk, particularly during recession periods. Although banks commonly sell syndicated loans shortly after origination, our results suggest that they remain vulnerable to pipeline risk. Our study has significant implications for policymakers and regulators, as it can aid in identifying banks exposed to systemic risk associated with leveraged and covenant-lite loans and in ranking systemically important financial institutions accordingly.

Transboundary Aquifer Management Across the Americas: Hydro-Diplomacy as an Accelerator of Adaptive Groundwater Governance Amid Climate Change Challenges

The management of transboundary aquifers across the Americas faces significant challenges, especially as climate change and population growth intensify groundwater stress. Groundwater use has increased to support domestic, industrial, and agricultural demands but has been extracted through unregulated withdrawals, leading to the severe degradation of aquifer health and transboundary frictions. This study focuses on how hydro-diplomacy can accelerate the adaptive governance of shared groundwater resources in three key regions: Canada–USA, USA–Mexico, and Mexico–Guatemala–Belize. We utilized a mixed methodology by integrating a transect approach, borrowed from ecology, into the field of geopolitics. To compare the hydro-diplomatic relations and groundwater governance across a continental gradient in the Americas, we conducted a literature review and employed the TWINS conflict–cooperation matrix to evaluate governance frameworks and hydro-diplomatic interactions across time. Our findings demonstrate that hydro-diplomacy plays a pivotal role in expediting agreements, fostering transboundary data sharing, and supporting participatory governance models. In particular, the presence of supranational bodies such as the International Joint Commission (IJC) between Canada and the USA has been effective in maintaining long-term collaboration through social learning and technical cooperation. Meanwhile, in regions like Mexico–Guatemala–Belize, the absence of robust institutions has hindered progress, with limited financial and knowledge-sharing networks. This study highlights the need for improved cross-border cooperation mechanisms and the establishment of common monitoring protocols to better manage aquifer resources under the pressures of climate change. The results support the development of more adaptive transboundary groundwater management strategies aligned with Sustainable Development Goal (SDG) 6.5.2 and call for broader geopolitical cooperation to address the complexities of groundwater governance.

Has the application of sanctions against financial institutions involved in money laundering had a deterrent effect?

Money laundering is one of the crimes that has a wide impact, both economically and socially. With the increasing complexity of global financial networks, financial institutions must be more responsible in preventing money laundering practices. The existence of strong and transparent financial institutions is essential to maintain the integrity of the financial system. Using normative juridical research methods, this study analyzes the regulations that govern sanctions and law enforcement practices. The purpose of this study is to evaluate whether the sanctions applied have provided a deterrent effect to financial institutions that violate the law. The results of the study show that although there are several institutions affected by sanctions, in general, the implementation of sanctions has not been effective in providing a significant deterrent effect. These obstacles arise due to the lack of strict supervision, weak international cooperation, and inconsistencies in law enforcement. In addition, the proactive attitude of financial institutions in fulfilling reporting obligations also needs to be improved. Therefore, reforms in the sanctions system and improved law enforcement mechanisms are needed to create a stronger deterrent effect against financial institutions involved in money laundering

Women's Empowerment through Islamic Microfinancing Initiatives for Microenterprises

Women's empowerment has increasingly been recognized as a critical component of sustainable economic development. Islamic microfinancing initiatives have emerged as a promising mechanism to support women's financial activities, particularly in Muslim-majority communities. Islamic microfinance is differentiated from conventional microfinance by emphasizing risk-sharing and commitment to social justice. This study explores the pivotal role of Islamic microfinancing initiatives in empowering women. The study adopts a conceptual framework that integrates various dimensions of empowerment such as economic, social, and psychological. By analyzing key factors such as loan amount, loan tenure, financial literacy support, support networks, age and sector of microenterprise, entrepreneurial experience, education level, and household income, this study aims to assess the impact of these initiatives on women's empowerment. Moreover, it is anticipated to offer valuable perspectives on the efficacy of Islamic microfinancing as a means to empower women. Furthermore, the findings are expected to guide policymakers and practitioners in designing and implementing more effective microfinancing programs that address the specific needs of women, thereby contributing to broader socio-economic progress.

Harnessing network power: Weaponised interdependence in global tax policy

AbstractFor decades, global tax policy has grappled with the challenge of mobile capital, failing to harness the regulatory potential of network power. This oversight has allowed tax havens to flourish, and multinational corporations and wealthy elites to circumvent state authority, undermining national fiscal policies and democratic capacity to meet grand societal challenges, such as climate change and inequality. But recent regulatory innovations pave a different way forward. This article spotlights the dynamics of ‘weaponized interdependence’, suggesting a critical role for strategically targeting global corporate and financial networks in reinvigorating action against tax havens, tax avoidance and tax evasion. Identifying and exploiting network chokepoints – financial institutions, corporate subsidiaries and expert intermediaries – can empower states to reassert their sovereignty and counterbalance the structural advantages of global capital. This approach helps us understand how and why recent regulatory measures have effectively countered financial secrecy, profit shifting and sanctions evasion, repairing public finances and restoring democratic integrity. In an age where weaponised interdependence is predominantly linked to national security, this recasting of global tax policy highlights a progressive path for using network power to develop effective global economic frameworks, strengthen democratic capacity and address contemporary challenges.

Leveraging Islamic Social Finance for Fair and Sustainable Tertiary Education Funding for Orphans in Malaysia: Insights from Sri Lanka

The primary objective of this paper is to draw lessons from Sri Lanka's experience with OrphanCare utilizing Islamic social finance, while also identifying avenues through which Malaysia could establish a sustainable model for achieving a similar purpose. This study uses a qualitative, exploratory approach to investigate the operational framework of OrphanCare in Sri Lanka and its potential lessons for Malaysia. Due to limited secondary sources, an unstructured interview with OrphanCare representatives was conducted to gather in-depth insights. The research unfolds in two phases: first, data collection from both primary (interviews) and secondary (reports, literature) sources to identify gaps and challenges; and second, the analysis of this data using content analysis. The OrphanCare interview from Sri Lanka offers crucial insights for Malaysia's mission in enabling orphan access to higher education. Challenges, like financial constraints and limited support networks, align with Malaysia's inequality reduction goals. Tertiary education benefits, including employability and personal growth, are highlighted. Islamic social finance lessons stress its transformative potential, while collaboration and long-term commitment are its strengths. Recommendations include education funds, support networks, career guidance, awareness campaigns, and sustainable collaborations. A regulatory framework featuring the Orphans Education Fund with a 2% annual contribution from listed companies, managed by National Higher Education Fund Corporation (PTPTN), is proposed. This paper demonstrates originality by uniquely proposing the utilization of Islamic Social Finance to enhance orphan access to tertiary education. It draws insights from Sri Lanka's OrphanCare model and presents innovative strategies for Malaysia to tackle inequalities through collaborative efforts and a robust regulatory framework.

Simulation-based evaluation of advanced threat detection and response in financial industry networks using zero trust and blockchain technology

The financial sector is increasingly facing advanced cyber threats, necessitating a shift from traditional security measures to more dynamic frameworks. This study presents a novel integration of Zero Trust architecture with hybrid access control system and blockchain technology to enhance security in financial institutions. Zero Trust enforces continuous authentication and dynamic access controls, while blockchain secures digital identities and transaction logs through its immutable ledger, ensuring data integrity and non-repudiation. The proposed framework, evaluated using OMNeT++ simulations enhanced by Ethereum-Ganache, shows improved detection accuracy, reduced false positives, and increased resistance to insider threats and other attacks. It also strengthens compliance with regulatory requirements through robust audit trails, providing enhanced protection for sensitive financial data.

Data‐efficient graph learning: Problems, progress, and prospects

AbstractGraph‐structured data, ranging from social networks to financial transaction networks, from citation networks to gene regulatory networks, have been widely used for modeling a myriad of real‐world systems. As a prevailing model architecture to model graph‐structured data, graph neural networks (GNNs) have drawn much attention in both academic and industrial communities in the past decades. Despite their success in different graph learning tasks, existing methods usually rely on learning from “big” data, requiring a large amount of labeled data for model training. However, it is common that real‐world graphs are associated with “small” labeled data as data annotation and labeling on graphs is always time and resource‐consuming. Therefore, it is imperative to investigate graph machine learning (graph ML) with low‐cost human supervision for low‐resource settings where limited or even no labeled data is available. This paper investigates a new research field—data‐efficient graph learning, which aims to push forward the performance boundary of graph ML models with different kinds of low‐cost supervision signals. Specifically, we outline the fundamental research problems, review the current progress, and discuss the future prospects of data‐efficient graph learning, aiming to illuminate the path for subsequent research in this field.

Hidden neighbours: extracting industry momentum from stock networks

This paper introduces an innovative method for constructing industry momentum portfolios by leveraging two stock networks: one based on stock price correlations and the other on corporate text similarity. We find that these networks capture different aspects of company relationships, motivating us to combine them and form a portfolio that exploits less visible industry momentum. Our Hidden Neighbours portfolio, analysed from 2013 to 2022, delivered an annualised return of 18.16% with a Sharpe ratio of 0.85, outperforming the S&P 500 and other traditional momentum strategies. Factor decomposition attributes returns primarily to the idiosyncratic factor α\\documentclass[12pt]{minimal} \\usepackage{amsmath} \\usepackage{wasysym} \\usepackage{amsfonts} \\usepackage{amssymb} \\usepackage{amsbsy} \\usepackage{mathrsfs} \\usepackage{upgreek} \\setlength{\\oddsidemargin}{-69pt} \\begin{document}$$\\alpha$$\\end{document}. Our study employs interdisciplinary methods, merging network analysis and Natural Language Processing (NLP) techniques for portfolio construction. Utilising advanced text embedding models, we enhance portfolio construction by integrating textual insights from corporate disclosures into stock networks. The paper offers a comprehensive strategy across diverse data and the interdisciplinary approach, uniting financial theory, network science, and NLP, advances both theory and practice of portfolio management.

Artificial intelligence driven cyberattack detection system using integration of deep belief network with convolution neural network on industrial IoT

In Industry 4.0, information and communication technology (ICT) was employed in numerous significant infrastructures, like financial networks, smart factories, and power plants, to automate and certify industrial systems. In power control systems, ICT technologies such as IIoT have improved automated monitoring, but legacy methods, originally autonomous, now connect with external networks. This progress has presented safety vulnerabilities from legacy ICT systems. Hence, various cybersecurity approaches are developed and examined to deal with cyberattacks and vulnerabilities. Utilizing new cybersecurity models in power control systems poses risks due to their uncertified safety. Ensuring their stability and efficiency is significant for maintaining reliable power delivery and incorporating these technologies into power control systems. Therefore, this study designs a Next–Generation Cybersecurity Attack Detection using an ensemble deep learning model (NGCAD-EDLM) technique in the IIoT environment. The main cause of the NGCAD-EDLM technique is the automatic recognition of cyber-attacks. In the NGCAD-EDLM approach, the primary data normalization phase utilizing min-max normalization is performed. Next, the honey-badger algorithm (HBA) approach selects the feature subsets. Furthermore, an ensemble deep learning (DL) of two methods, namely convolutional neural networks (CNNs) and deep belief networks (DBNs) methods, are employed for classification. In addition, the DL techniques' hyperparameter selection is accomplished using the lotus effect optimization algorithm (LEOA) method. A complete set of simulation validation is performed to establish the experimental analysis of the NGCAD-EDLM method. The performance validation of the NGCAD-EDLM method exhibited a superior accuracy value of 99.21 % over other existing techniques.

The Infrastructural Power of the Cayman Islands and the US State Power: A Financial Networks Centrality Approach

ABSTRACT This paper explores the symbiotic relationship between the Cayman Islands and the centrality of the United States (US) in global financial networks, using their connection as a test case for a broader theory of how infrastructural power of states is achieved through transnational and networked strategies. The legal and financial infrastructure of the Cayman Islands is extensively used by US financial institutions. This infrastructure supports the development of a significantly US-centric fund industry, facilitating substantial investments into US capital markets. Additionally, it serves as a global conduit, channelling funds from regions such as Asia and Latin America into US markets, streamlining the process by which foreign investors acquire US securities, and supporting the development of complex USD-denominated financial products. This dynamic enhances the depth, liquidity, and complexity of US capital markets, thereby reinforcing US centrality in global financial networks and bolstering its geopolitical power through financial diplomacy, economic sanctions, regulatory influence, and control over critical financial infrastructure. The relationship underscores the infrastructural power of the Cayman Islands, whose financial and legal framework is essential for sustaining and amplifying US centrality. Consequently, this paper aims to integrate the transnational perspective on infrastructural power within the International Political Economy (IPE) and Geopolitics literature, demonstrating how the Cayman Islands function as a multifaceted networked site that strengthens, projects, and sustains US state power on a global scale.

Causal Hierarchy in the Financial Market Network-Uncovered by the Helmholtz-Hodge-Kodaira Decomposition.

Granger causality can uncover the cause-and-effect relationships in financial networks. However, such networks can be convoluted and difficult to interpret, but the Helmholtz-Hodge-Kodaira decomposition can split them into rotational and gradient components which reveal the hierarchy of the Granger causality flow. Using Kenneth French's business sector return time series, it is revealed that during the COVID crisis, precious metals and pharmaceutical products were causal drivers of the financial network. Moreover, the estimated Granger causality network shows a high connectivity during the crisis, which means that the research presented here can be especially useful for understanding crises in the market better by revealing the dominant drivers of crisis dynamics.

Assessing the Survey Dataset on Employment Status of Students before Graduates in Malaysian Public Higher Learning Institutions in Selangor

Employment status of student in Malaysian Public Higher Learning Institution play significant role in identified the marketability of university student in the industry. However, there are also a group of university students who began their employment before graduating from university. The increase of tuition fee charge, insufficient financial support, experience, and networking are the factor contributed towards the employment of student before graduation in Malaysian Public Higher Learning Institution, particularly in Selangor. Therefore, the purpose of this study to examine the employment status of student before graduates in various sector at Malaysian Public Higher Learning Institution in Selangor. The quantitative research approach has been adopted in exploring the topic of this study by using the survey dataset approaches. Almost 2,489 university students have participated in this study. The findings show 593 university students actively have occupations during their study either undergraduate or postgraduate student. Through the findings, the university student has actively sought the job opportunities before graduation in university for their livelihood especially after the post-pandemic Covid19 who affected all group of community particularly in Malaysia. The finding of this study will contribute to the government and private organizations to strategizing the action plan by providing the flexible time for the working student in adapting their study and career.

Endogenous Risk Exposure and Systemic Instability

Most research on systemic stability assumes an economy where banks are subject to exogenous shocks. However, in practice, banks choose their exposure to risk. I show that there exists a network risk-taking externality: the risk exposure choices made by connected banks are strategically complementary. Banks within financial networks, especially densely connected ones, become endogenously exposed to excessive risks. The theory offers several novel perspectives on policy debates. For instance, it suggests that limiting government bailouts to interbank exposures can effectively reduce endogenous systemic risk. This paper was accepted by Kay Giesecke, finance. Funding: This work was financially supported by the USC Dornsife Institute for New Economic Thinking Fellowship, the Marshall PhD Fellowship, and European Finance Association Doctoral Tutorial Best Paper Prize. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2022.01519 .

Dynamic clearing and contagion in financial networks

In this paper we introduce a generalized extension of the Eisenberg–Noe model of financial contagion to allow for time dynamics of the interbank liabilities, including a dynamic examination of default risk. This framework separates the cash account and long-term capital account to more accurately model the health of a financial institution. In doing so, such a system allows us to distinguish between delinquency and default as well as between defaults resulting from either insolvency or illiquidity.

Development of a tool to assess financial advocacy service delivery.

21 Background: In 2023, the Association of Cancer Care Centers (ACCC) Financial Advocacy Network published Financial Advocacy Services Guidelines developed through an expert-led, consensus-driven process (1). The Guidelines provide a framework for equitable delivery of financial advocacy (FA) services to address patients’ financial concerns. The Guidelines cover 3 domains: financial advocacy services and functions, program management functions, and partner engagement functions. ACCC adapted the Guidelines into a Financial Advocacy Services Assessment Tool to help cancer care organizations assess and improve service delivery and to advance research of organization-level FA practices across the U.S. Methods: ACCC convened an expert task force to guide this work. ACCC conducted a scan of implementation science literature and health care organizational assessments to inform the development of a rating system for each of the 43 guidelines. Four service delivery levels were identified, and a score was assigned to each level (Table). The tool was programmed in Qualtrics to provide a total score and average score per guideline for each FA domain and sub-domain. The task force added unscored questions about organizational demographics, barriers, and readiness to enable aggregate research and sub-group analysis. ACCC invited members of the Financial Advocacy Network to participate in a pilot via email invitation and provided opportunities for open-ended feedback. Results: 20 cancer centers participated in the pilot between March-May 2024. 15% were academic institutions and 85% were community-based programs (18% of which are directly affiliated with an academic institution). Respondents reported the tool was easy to use and informative for quality improvement efforts. See Table 1 for total scores for initial pilot. Conclusions: Pilot results reflect that all participating cancer centers are already engaged in some level of FA services. Broader dissemination and analysis is ongoing. The assessment provides centers with a practical resource to assess alignment to guidelines and identify opportunities for quality improvement. Regular review of aggregate results will help ACCC provide benchmarks for areas of service delivery, identify barriers to implementation, and monitor trends in FA staffing. 1. Kajdic Hodzic R, Liang MI, et al. Developing consensus-based oncology financial advocacy services guidelines. JCO Oncol Pract. 2023;19(suppl 11):38. Levels of FA service delivery and pilot total scores. Level Description % of pilot cancer centers Level 1 Not performing financial advocacy services. 0% Level 2 Making progress with financial advocacy services, but it is done informally or inconsistently. 35% Level 3 Performing financial advocacy services consistently in at least one key area of the organization. 60% Level 4 Reliably performing financial advocacy services across all key areas of the organization. 5%

Identifying crucial financial markets in the flows of cross-border capital – evidence from China's financial risk network

With the increasing openness of China's financial markets, it is important to address cross-border capital risks. This paper first calculates the stress indicators of financial markets by 24 variables, and then utilizes the Diebold-Yilmaz connectedness approach to examine the spillover effects among the volatility of cross-border capital and the stress indicators of various financial markets. We show both the real estate and stock market are crucial for cross-border capital flow. Using the rolling window method, we find significant time-varying spillovers between cross-border capital and financial markets, which peak during the periods with significant events such as the global financial crisis, the COVID-19 epidemic, and the shift in currency regime. This paper further applies the Markov-switching autoregressive model to identify three different states for the synthetic financial stress. After re-analyzing the subsample data, we observe that stock and real estate markets play significant roles in the low-stress state, foreign exchange and real estate markets in the medium-stress state, and stock and money markets in the high-stress state.

Information flow in the FTX bankruptcy: A network approach

This paper investigates the cryptocurrency network of the FTX exchange during the collapse of its native token, FTT, to understand how network structures adapt to significant financial disruptions, by exploiting vertex centrality measures. Using proprietary data on the transactional relationships between various cryptocurrencies, we construct the filtered correlation matrix to identify the most significant relations in the FTX and Binance markets. By using suitable centrality measures - closeness and information centrality - we assess network stability during FTX’s bankruptcy. The findings document the appropriateness of such vertex centralities in understanding the resilience and vulnerabilities of financial networks. By tracking the changes in centrality values before and during the FTX crisis, this study provides useful insights into the structural dynamics of the cryptocurrency market. Results reveal how different cryptocurrencies experienced shifts in their network roles due to the crisis. Moreover, our findings highlight the interconnectedness of cryptocurrency markets and how the failure of a single entity can lead to widespread repercussions that destabilize other nodes of the network.

Financing a Revolution: The Impact of Bolívar's British Networks in the Independence of Colombia

Abstract This article explores the financial and geopolitical networks behind the independence of Gran Colombia. It shows that the failure to obtain official British government support for independence was compensated for by the development of a network of private individuals and partnerships that supplied large quantities of arms, equipment and men. A Colombian government document granting ‘Powers’ to London intermediaries was crucial to the construction of this network. We analyse who the key players were and how the network operated. By exploring the decisions and actions of merchants through the lens of risk, trust, credit and networks, we provide a fresh insight into the wider process of independence in Gran Colombia.