New Tools for Monitoring Financial Stability
The 2008 financial crisis has accentuated the need for effective monitoring, oversight, and regulation of financial markets and institutions. Complex market structures with intricate relationships among financial institutions can propagate and amplify shocks, fostering systemic risk. Shawn P. Mankad, Johnson Graduate School of Management, and collaborators are developing an integrative framework that leverages a wide array of diverse quantitative financial datastreams, along with metadata and market announcements, to identify and predict market participants that could endanger the financial system.
With a team comprised of a colleague from the University of Florida and an advisory panel of economists from the United States Federal Reserve Board, Mankad is building upon accounting principles, modern statistics, and computer science. The research also incorporates recent financial and economic ideas aimed at assessing threats to financial stability and uncovering the complexity of financial systems in different market conditions. The research outcomes provide new methods for complex big data and empirical results that can advance the state-of-the-art in financial research. In addition, the project contributes important tools that support and enhance financial policy-making and decision-making.