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Risk propagation model based on social life and credit activities multilayers fusion network
Author(s) -
Su Wangshu,
Ren Jinzheng
Publication year - 2018
Publication title -
concurrency and computation: practice and experience
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.309
H-Index - 67
eISSN - 1532-0634
pISSN - 1532-0626
DOI - 10.1002/cpe.4732
Subject(s) - microfinance , bankruptcy , business , market liquidity , asset (computer security) , maturity (psychological) , flourishing , credit risk , systemic risk , industrial organization , risk analysis (engineering) , financial system , economics , actuarial science , finance , financial crisis , computer science , economic growth , computer security , psychology , developmental psychology , psychotherapist , macroeconomics
Summary The financial activities contribute the most important part to the current society, since they deliver key qualitative asset transformation works in terms of maturity, liquidity, and volume. Usually, we evaluate the level of development of a country by measuring the perfection of financial market. Meanwhile, the economy is driven by the flourishing SME (small and micro enterprise), which makes the Microfinance become an important driver currently. The rapid expansion of Microfinance industry increases the fragility and instability of the whole society as the internal defects and economic environment; this paper proposes a propagation model based on a multilayer network, to seek the effective and practical solution to promote a sustainable and healthy path for Microfinance industry. The study simulates a system crisis caused by bankruptcy of Microfinance organization. In addition, we run the model with the real financial data, and therefore, a risk control scheme is designed based on the systematic risk evaluation, we demonstrate that the risk propagation model can help understand the mechanism of risk propagation within the system, and we provide preventive measures and offer support for policy making.