In financial ecosystems, big banks trample economic habitats and spread fiscal disease
Posted November 14, 2012; 09:00 a.m.
by Morgan Kelly, Office of Communications
EXTRACT:
Lead author and Princeton mathematical epidemiologist Nimalan Arinaminpathy explained that the paper represents part of an effort to examine how tumult such as the 2007-08 global financial crisis can spread throughout a banking system. Prior to the crisis, regulators typically judged banks on their individual health rather than their potential threat to the overall network, he said.
“In terms of regulation, there was really very little attention to how the financial system worked as a whole,” said Arinaminpathy, who is a postdoctoral research associate in Princeton's Department of Ecology and Evolutionary Biology.
