Acharya, V., L. Pedersen, T. Philippon, and M. Richardson. 2010. “A Tax on Systemic Risk.” In Regulating Wall Street: The Dodd-Frank Act and the New Architecture of Global Finance, edited by V. Acharya, T. Cooley, M. Richardson, and I. Walter. Hoboken, NJ: John Wiley & Sons.Google Scholar
Allen, F., and A. Babus. 2009. “Networks in Finance.” In Network-Based Strategies and Competencies, edited by P. Kleindorfer and J. Wind. Upper Saddle River, NJ: Wharton School Publishing.Google Scholar
Bernanke, B., C. Betaut, L. DeMarco, and S. Kamin. 2011. “International Capital Flows and the Returns to Safe Assets in the United States, 2003–2007.” Board of Governors of the Federal Reserve, International Finance Discussion Papers No. 1014.Google Scholar
Borgatti, S., and M. Everett. 1999. “Models of Core/Periphery Networks.” Social Networks 21:375–95.Google Scholar
Caballero, R. 2006. “On the Macroeconomics of Asset Shortages,” mimeo.Google Scholar
Claessens, S., D. Klingebiel, and S. Schmukler. 2002. “Explaining the Migration of Stocks from Exchanges in Emerging Economies to International Centers,” CEPR Discussion Paper No. 3301.Google Scholar
Craig, B., and G. von Peter. 2014. “Interbank Tiering and Money Center Banks.” Journal of Financial Intermediation: in press. doi: 10.1016/j.jfi.2014.02.003.Google Scholar
van Dijk, M., F. Weyzig, and R. Murphy. 2006. The Netherlands: A Tax Heaven? Amsterdam: SOMO.Google Scholar
Doreian, P., V. Batajeli, and A. Ferligoy. 2005. Generalized Blockmodeling. Cambridge, UK: Cambridge University Press.Google Scholar
Eichengreen, B. 2009. “Out of the Box Thoughts about the International Financial Architecture,” IMF Working Paper No. 09/116.Google Scholar
Fricke, D., K. Finger, and T. Lux. 2013. “On Assortative and Disassortative Mixing in Scale-Free Networks: The Case of Interbank Credit Networks,” mimeo.Google Scholar
Fricke, D., and T. Lux. 2012. “Core-Periphery Structure in the Overnight Money Market: Evidence from the e-MID Trading Platform,” Kiel Working Paper No. 1759.Google Scholar
Gourinchas, P. O., and O. Jeanne. 2009. “Capital Flows to Developing Countries: The Allocation Puzzle,” Peterson Institute for International Economics Working Paper No. 09-12.Google Scholar
Haldane, A. 2009. “Rethinking the Financial Network,” mimeo.Google Scholar
Hale, G. 2011. “Bank Relationships, Business Cycles, and Financial Crises,” NBER Working Paper No. 17356.Google Scholar
Hattori, M., and Y. Suda. 2007. “Developments in a Cross-Border Bank Exposure Network,” Bank of Japan Working Paper No. 07-E-21.Google Scholar
International Monetary Fund. 2011. “Mapping Cross-Border Financial Linkages: A Supporting Case for Global Financial Safety Net,” Staff Paper.Google Scholar
Iori, G., G. De Masi, O. Precup, G. Gabbi, and G. Caldarelli. 2008. “A Network Analysis of the Italian Overnight Money Market.” Journal of Economic Dynamics and Control 32:259–78.CrossrefGoogle Scholar
Issing, O., and J. Krahnen. 2009. “Why the Regulators Must Have a Global ‘risk Map’.” Financial Times, February 19.Google Scholar
Jackson, M. 2008. Social and Economic Networks. Princeton, NJ: Princeton University Press.Google Scholar
Kindleberger, C. 1974. “The Formation of Financial Centers: A Study on Comparative Economic History,” Princeton Studies in International Finance No. 36.Google Scholar
Laeven, L., and F. Valencia. 2008. “Systemic Banking Crises: A New Database,” IMF Working Paper No. 08/224.Google Scholar
Laeven, L., and F. Valencia. 2012. “Systemic Banking Crises Database: Un Update,” IMF Working Paper No. 12/163.Google Scholar
Lane, P., and G. M. Milesi-Ferretti. 2001. “The External Wealth of Nations: Measures of Foreign Assets and Liabilities for Industrial and Developing Countries.” Journal of International Economics 55:263–94.CrossrefGoogle Scholar
Lane, P., and G. M. Milesi-Ferretti. 2007. “The External Wealth of Nations Mark II: Revised and Extended Estimates of Foreign Assets and Liabilities, 1970–2004.” Journal of International Economics 73:223–50.CrossrefGoogle Scholar
Lane, P., and G. M. Milesi-Ferretti. 2010. “Cross-Border Investment in Small International Financial Centers,” IMF Working Paper No. 10/38.Google Scholar
van Lelyveld, I., and in’t Veld, D. 2012. “Finding the Core: Network Structure in Interbank Markets,” De Bederlandsche Bank Working Paper No. 348.Google Scholar
Lucas, R. 1990. “Why Doesn’t Capital Flow From Rich to Poor Countries?” American Economic Review 1990:92–96.Google Scholar
Markose, S. 2012. “Systemic Risk from Global Financial Derivatives: A Network Analysis of Contagion and Its Mitigation with Super-Spreader Tax,” IMF Working Paper No. 12/282.Google Scholar
A. Morriss, ed. 2010. Offshore Financial Centers and Regulatory Competition. Washington, DC: American Enterprise Institute.Google Scholar
Newman, M. 2010. Networks – An Introduction. Oxford, UK: Oxford University Press.Google Scholar
Obstfeld, M. 2009. “Lenders of Last Resort in a Globalized World,” mimeo.Google Scholar
von Peter, G. 2007. “International Banking Centres: A Network Perspective.” BIS Quarterly Review, December, 2007, 33–45.Google Scholar
Prasad, E., R. Rajan, and A. Subramanian. 2007. “Foreign Capital and Economic Growth.” Brookings Papers on Economic Activity Spring:153–230.Google Scholar
Soramäki, K., M. L. Bech, J. Arnold, R. J. Glass, and W. Beyeler. 2006. “The Topology of Interbank Payment Flows,” Federal Reserve Bank of New York, Staff Report No. 243.Google Scholar
Yeandle, M., N. Danev, C. von Gunten, and M. Mainelli. 2013. “The Global Financial Centres Index 13,” Z/Yen Group and Qatar Financial Centre Authority.Google Scholar
Zoromè, A. 2007. “Concept of Offshore Financial Centers: In Search of an Operational Definition,” IMF Working Paper No. 07/87.Google Scholar
About the article
Published Online: 2014-06-17
Published in Print: 2014-06-01
The list of offshore financial centers maintained by the IMF in its Assessment Program can be consulted at http://www.imf.org/external/NP/ofca/OFCA.aspx. Our choice to consider the Netherlands as an off-shore center will be motivated below.
The attribute of complexity is referred to a network which is neither regular nor purely random.
For a survey of applications of network theory to finance see Allen and Babus (2009).
At least for scale-free networks with relatively small-scale exponents (Fricke, Finger, and Lux 2013).
For a survey on the literature on international financial centers exploring the intersections between economics and geography see Tschoegl (2000).
Centrality can be alternatively measured by the number of links terminating upon a node (in degree), by the distance from other nodes (closeness), or by assessing the degree by which a node lies on the shortest path between any two other nodes (betweenness).
Node strength is the total value of flows originating or terminating in a given node.
The prestige index measures the importance of a node by taking into account the importance of its neighbors.
Since the network is not self-referential, in what follows diagonal elements will be ignored.
The combinatorial optimization exercise for detecting a discrete core/periphery structure has been based on a genetic algorithm, see Borgatti and Everett (1999, 381).
The model has been developed to analyze instances of the German interbank market. Other applications to the Italian and the Dutch cases can be found in Fricke and Lux (2012) and van Lelyveld and in’t Veld (2012), respectively.
That is, at least one entry has to be non-zero in each column of CR and in each row or RR.
The data can be retrieved at http://cpis.imf.org/.
Each year a certain number of nodes are isolated. We retain them in the network if they contribute with a positive entry to the total adjacency matrix in at least one of the years under scrutiny. This allows us to take into account the evolution over time of international financial integration, and it facilitates intertemporal comparisons.
Their analysis covers the time span 2001–2010.
In absolute terms, the average number of core components are 66 and 44 for the discrete and the tiering models, respectively.
For ease of exposition, we present results for the tiering model only. The stability of the link structure for the discrete model is qualitatively similar.
Recall that the total error score should not be interpreted as a percentage, given that an error can occur either because of the absence of a link where the link is expected to exist or because of the presence of a link where the latter ought to be absent.
Furthermore, some commentators have forcefully argued that during the last decades the favorable Dutch taxation regime has been extensively used by foreign corporations to implement sophisticated tax planning strategies, and that this has characterized the Dutch financial system as a conduit for financial flows to and from tax heavens (van Dijk, Weyzig, and Murphy 2006).