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Analysis of the Effect of Financial Regulation on Market Collapse Process in Financial Network

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Agents and Multi-agent Systems: Technologies and Applications 2019

Part of the book series: Smart Innovation, Systems and Technologies ((SIST,volume 148))

Abstract

This study focuses on the influence of the market collapse process of financial institutions under financial regulation on financial systems. For this purpose, the authors expand simulation models of systemic risks expressing financial regulation and the financing behavior of financial institutions. Using this model, scenario analysis is performed how the collapse process in the financial system changes due to the balance sheet constraint. Our numerical experiment shows that (1) as the amount of marketable assets is increased, the type of failed process with high occurrence changes, and (2) when there is a balance sheet restriction, the frequency of chain collapse is suppressed.

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Notes

  1. 1.

    Computational approach has been employed to analyze the dynamics of financial crisis [6,7,8,9]. The complete list is given in [4, 5].

  2. 2.

    Note that, since we look at the impact of surplus operating behavior and price fluctuations of market assets on the financial condition and cash flow of financial institutions, we do not deal with trading networks of nonmarketable assets and trading networks between the central bank and commercial financial institutions.

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Author information

Authors and Affiliations

  1. Keio University, 4-1-1 Hiyoshi Kohoku-ku, Yokohama, Kanagawa, Japan

    Takamasa Kikuchi & Hiroshi Takahashi

  2. Tokyo Institute of Technology, 4259 Nagatsuta-cho, Yokohama, Kanagawa, Japan

    Masaaki Kunigami

  3. Yamaguchi University, 1677-1 Yoshida, Yamaguchi-shi, Yamaguchi, Japan

    Takashi Yamada

  4. Chiba University of Commerce, 1-3-1 Konodai, Ichikawa-shi, Ichikawa, Chiba, Japan

    Takao Terano

Authors
  1. Takamasa Kikuchi
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  2. Masaaki Kunigami
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  3. Takashi Yamada
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  4. Hiroshi Takahashi
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  5. Takao Terano
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Corresponding author

Correspondence to Takamasa Kikuchi .

Editor information

Editors and Affiliations

  1. Faculty of Electrical Engineering and Computing, University of Zagreb, Zagreb, Croatia

    Gordan Jezic

  2. School of Mathematical and Computer Sciences, Heriot-Watt University, Edinburgh, UK

    Yun-Heh Jessica Chen-Burger

  3. Faculty of Electrical Engineering and Computing, University of Zagreb, Zagreb, Croatia

    Mario Kusek

  4. Department of Business Economics & Management, Silesian University, Karviná, Czech Republic

    Roman Šperka

  5. Bournemouth University and KES International Research, Poole, Dorset, UK

    Robert J. Howlett

  6. University of Canberra, Canberra, ACT, Australia

    Lakhmi C. Jain

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Kikuchi, T., Kunigami, M., Yamada, T., Takahashi, H., Terano, T. (2020). Analysis of the Effect of Financial Regulation on Market Collapse Process in Financial Network. In: Jezic, G., Chen-Burger, YH., Kusek, M., Šperka, R., Howlett, R., Jain, L. (eds) Agents and Multi-agent Systems: Technologies and Applications 2019. Smart Innovation, Systems and Technologies, vol 148. Springer, Singapore. https://doi.org/10.1007/978-981-13-8679-4_21

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