Systematic analysis of banking sector interconnectedness and systemic risk measurement approaches

Posted: Oct 28, 2025

• Prof. Matteo Weber
• Prof. Matteo Zhang
• Prof. Mia Rossi

Abstract

The global financial system has undergone profound transformations over the past decades, characterized by increasing complexity, interconnectedness, and the emergence of new risk transmission channels. The 2008 financial crisis starkly revealed the limitations of traditional risk assessment frameworks that focused primarily on individual institution stability while neglecting systemic vulnerabilities arising from network interdependencies. This research addresses the critical need for more sophisticated approaches to understanding and measuring banking sector interconnectedness and systemic risk. Our research introduces a novel framework that integrates multiple dimensions of banking interconnectedness into a unified systemic risk measurement approach. We move beyond the traditional binary distinction between systemically important and non-systemic institutions by developing a continuous, multi-faceted assessment methodology.