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Presentation at Circuits of Profit and NetONets in Budapest on 6 and 7 June 2011. The videos in the presentation are missing in this slideshare copy. They will be available later.
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Visualizing Financial
Networksnew understanding of the financial system and implications for policy
makers
Inês SalpicoKimmo Soramäki
Soramäki Networks
Circuits of Profit6th June 2011
Context: Aftermath of the financial crisis
• Understanding of the network nature of the financial system
Systemic risk:“too connected to fail”
Context: Aftermath of the financial crisis
• Stress and increase of regulation
• Understanding of the network nature of the financial system
Context: Aftermath of the financial crisis
• Stress and increase of regulation
• Extended mandate(s) to collect data
• Understanding of the network nature of the financial system
SUPERVISIONREGULATION
Data
SUPERVISIONREGULATION
Data
Real world
Context: Aftermath of the financial crisis
• Stress and increase of regulation
• Extended mandate(s) to collect data
• Need to process and analyze this data
• Understanding of the network nature of the financial system
SUPERVISIONREGULATION
Data
THEORYRESEARCH
Methods
Questions:
• How to make sense of data?
Questions:
• How to make data analysis actually operative in supervision and regulation?
• How to make sense of data?
SUPERVISIONREGULATION
Data
THEORYRESEARCH
Methods
New adequate analytical paradigms
namely: network
Questions:
• How to make data analysis actually operative in policy and supervision?
• How to make sense of data?
• How to use analysis to actually see what’s happening in the system?
x(You wish!)
Intelligence?
• Financial crisis are different and rare
Intelligence?
• Financial crisis are different and rare
• Pattern recognition is hard for computers
Intelligence?
• Financial crisis are different and rare
• Pattern recognition is hard for computers
• The patterns to be recognized would have to be frequent enough for computers to learn
Intelligence?
AI - Artificial Intelligence
Intelligence?
AI - Artificial Intelligence
IA - Intelligence Amplification
Tools that make data and analysis actionable for humans
ref: William Ross Ashby (1956) in ‘Introduction to Cybernetics’
FNA
Platform for
– Exploring – Analyzing– Visualizing
financial networks
Paradigm
Data
validation
Analysis and modeling
Visualization
understanding
Versions
– Web – Cloud service– REST API (for accessing FNA engine from web applications)
– Intranet– Operative use– Integration to databases and user management– Browser based GUI
– Desktop – By demand, academic use– Command line version available– Integration with external programs like Matlab, Stata, Excel, etc.
Thank you
More informationwww.financialnetworkanalysis.com
Contact uskimmo.soramaki@fna.fi
ines.salpico@fna.fi
Objectives
• Provide a tool for time series analysis of network data in finance
• Provide a platform for building agent based and simulation models
• Make advances in research available to policy
• Ease of use, performance and security
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