financial network analytics @ netonets
DESCRIPTION
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.TRANSCRIPT
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.
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