Abstract

The Centre for Financial Analysis & Policy (CFAP) will be holding its annual conference in March in Cambridge. Interconnections in Financial Markets – Theoretical and Empirical Perspectives Modern financial systems are highly interconnected. The recent financial turmoil has been astoundingly successful in unravelling the consequences brought about by the complex system of interactions between financial institutions. While such interdependencies have always been a concern for systemic risk, their role in the current financial crisis was difficult to foresee and largely overlooked. A more complete characterisation of financial markets is therefore required to adequately account for the multitude of interconnections that link financial institutions. The key challenge of this conference will be in understanding financial interdependencies so as to identify and reduce the associated risks for the economy. We aim to initiate a discussion to address various aspects of financial interconnections such as the role they play in financial crises, informational linkages and their impact on trading decisions, social networks and consumer finance. We are particularly interested in contributions from a wide spectrum of methodologies including contemporary network theory, sociology and epidemiology. The discussions will also address policy and social welfare considerations. This event aims to: • bring together leading researchers/academics from the diverse fields related to this area • discuss and uncover the relevant issues for modern financial systems and the dynamical processes evolving on systems of this kind • develop new directions, possibly at the intersection of several fields represented at this workshop