iConViz: Interactive Visual Exploration of the Default Contagion Risk of Networked-Guarantee Loans

Zhibin Niu, Runlin Li, Junqi Wu, Dawei Cheng, Jiawan Zhang

View presentation: 2020-10-30T16:15:00Z GMT-0600 Change your timezone on the schedule page
2020-10-30T16:15:00Z
Exemplar figure
System interface of iConViz: (a) Guarantee Network Explorer. It facilitates an overview of and zooming in on levels of detail regarding guarantee networks using a network tessellation layout. It also offers intuitive metaphorical symbols (Contagion Effect Badges) of contagion risk to support the selection of interesting networks. (b) Contagion Effect Matrix. This gives detailed contagion risk patterns and quantifies severity. (c) Chain Instance Explorer. This supports further narrowing of the search space for instances of contagion from a financial perspective. (d) Node Instance Explorer. This visualizes the finest-grain information on demand.
Keywords

Visualization analytics, Regulatory visualization

Abstract

Groups of enterprises can serve as guarantees for one another and form complex networks when obtaining loans from commercial banks. During economic slowdowns, corporate default may spread like a virus and lead to large-scale defaults or even systemic financial crises. To help financial regulatory authorities and banks manage the risk associated with networked loans, we identified the default contagion risk, a pivotal issue in developing preventive measures, and established iConViz, an interactive visual analysis tool that facilitates the closed-loop analysis process. A novel financial metric, the contagion effect, was formulated to quantify the infectious consequences of guarantee chains in this type of network. Based on this metric, we designed and implement a series of novel and coordinated views that address the analysis of financial problems. Experts evaluated the system using real-world financial data. The proposed approach grants practitioners the ability to avoid previous ad hoc analysis methodologies and extend coverage of the conventional Capital Accord to the banking industry.