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A Multi-Layer Network of the Colombian Sovereign Securities Market

A Multi-Layer Network of the Colombian Sovereign Securities Market

Carlos León, Jhonatan Pérez, Luc Renneboog
Copyright: © 2016 |Pages: 26
ISBN13: 9781466687455|ISBN10: 1466687452|EISBN13: 9781466687462
DOI: 10.4018/978-1-4666-8745-5.ch007
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MLA

León, Carlos, et al. "A Multi-Layer Network of the Colombian Sovereign Securities Market." Analyzing the Economics of Financial Market Infrastructures, edited by Martin Diehl, et al., IGI Global, 2016, pp. 124-149. https://doi.org/10.4018/978-1-4666-8745-5.ch007

APA

León, C., Pérez, J., & Renneboog, L. (2016). A Multi-Layer Network of the Colombian Sovereign Securities Market. In M. Diehl, B. Alexandrova-Kabadjova, R. Heuver, & S. Martínez-Jaramillo (Eds.), Analyzing the Economics of Financial Market Infrastructures (pp. 124-149). IGI Global. https://doi.org/10.4018/978-1-4666-8745-5.ch007

Chicago

León, Carlos, Jhonatan Pérez, and Luc Renneboog. "A Multi-Layer Network of the Colombian Sovereign Securities Market." In Analyzing the Economics of Financial Market Infrastructures, edited by Martin Diehl, et al., 124-149. Hershey, PA: IGI Global, 2016. https://doi.org/10.4018/978-1-4666-8745-5.ch007

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Abstract

This chapter examines the network of Colombian sovereign securities settlements. With data from the settlement market infrastructure we study financial institutions' transactions from three different trading and registering networks that we combine into a multi-layer network. Examining this network of networks enables us to confirm that (i) studying isolated single-layer trading and registering networks yields a misleading perspective on the relations between and risks induced by participating financial institutions; (ii) a multi-layer approach produces a connective structure consistent with most real-world networks (e.g. sparse, inhomogeneous, and clustered); and (iii) the multi-layer network is a multiplex that preserves the main connective features of its constituent layers due to positively correlated multiplexity. The results highlight the importance of mapping and understanding how financial institutions relate to each other across multiple financial environments, and the value of financial market infrastructures as sources of data for working on multi-layer financial networks.

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