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European Insurance and Occupational Pensions Authority
General publications

How to Measure Interconnectedness


Publication date
1 December 2014


Interconnectedness is considered as a key component to systemic risk supervision. However, there is little guidance on its measurement. Using a unique dataset of bilateral exposures between 21 French financial institutions, we analyse and compare several strategies to measure interconnectedness. We show that these measures tackle interconnectedness from different vantage points: substitutability, integration, core-periphery, systemic importance and systemic fragility. Without promoting one strategy as a panacea to measure interconnectedness, we provide insights on the pros and cons of each measure.


31 JANUARY 2023
How to measure interconnectedness - Thematic article - Dec 2104
(743.74 KB - PDF)