Europe connected by banks

14/01/2011

A lot of discussion in the Eurozone has been about the cascading effects of bad banking. The interconnections between banks is difficult to explain and several governments in EU nations are facing political challenges explaining the bailout of other countries. Using the data in European Central Bank statistical database, I’ve made this simple graph to portray the nation network of European banks:

A connection in the graph means that a financial institution has a branch in the target country. Size on the node represents overall centrality in financial industry. We see that UK is far most the central banking nation, with Germany on second place. Thickness of the links represents the amount shared banks: the intertwining of economies.

The color of the node represents a ‘community’ of nations: how interconnected their banking areas are. We can see that the problems in Portugal, Spain, Italy and Belgium are primarily a problem for the central European countries but they quickly affect rest of Europe.

This picture is  the connections between the locations of financial institutions and it doesn’t include debts or other financial links. In the light of this picture, a bailout for Portugal, Spain, Italy and Belgium is coming when needed.

Update: Connections between the main financial institutions

With the same dataset we can also examine how the banks are connected to each other. Connection between two banks means that they both have operations in the same country. Average bank has branches in two countries, so let’s focus on those banks that have common operations in three countries.

We see that French bank BNB Paribas is the most connected bank in Europe and it has parallel interests with Deutche Bank. Some communities seem to form (color).

www.verkostoanatomia.fi

twitter/jattipaa

Visualization with Gephi

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: