Network theory to strengthen the banking system
Since the beginning of the financial crises that erupted in 2008, numerous governments have injected public funds into the banking system in order to prevent the failure of some entities and avoid the collective collapse of the system itself. Furthermore, to strengthen the robustness of the banking system, central banks increase the reserve capital requirements, that is, the percentage of money that banks must hold, and not loan out. “This cash ratio has been uniformly applied to all of the firms, without taking into account which banks are the most important from a systemic perspective, and nothing has been done about the relationship between entities to reform the network and make it more resistant to a financial shock”, explains an expert.