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Redundancy of Centrality Measures in Financial Market Infrastructures

Author

Listed:
  • Martínez-Ventura, Constanza
  • Mariño-Martínez, Ricardo
  • Miguélez-Márquez, Javier
Abstract
The concept of centrality is widely used to monitor systems with a network structure because it allows identifying their most influential participants. This monitoring task can be difficult if the number of system participants is considerably large or if the wide variety of centrality measures currently available produce non-coincident (or mixed) signals. This document uses robust principal component analysis to evaluate a set of centrality measures calculated for the financial institutions that participate in Colombia's four financial market infrastructures. The results obtained are used to construct general indices of centrality, using the most robust measures of centrality as inputs and leaving aside those considered redundant.

Suggested Citation

  • Martínez-Ventura, Constanza & Mariño-Martínez, Ricardo & Miguélez-Márquez, Javier, 2023. "Redundancy of Centrality Measures in Financial Market Infrastructures," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 4(4).
    • Handle: RePEc:eee:lajcba:v:4:y:2023:i:4:s2666143823000194
    DOI: 10.1016/j.latcb.2023.100098
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    More about this item

    Keywords

    Centrality; Robust principal component analysis; Redundancy analysis; Clustering analysis;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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