Visualizing Financial Networks @ Visualizar '11

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New understanding of the financial system and implications for policy makers

(with Ines Salpico)

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Visualizing Financial Networks @ Visualizar '11

  1. 1. VISUALIZAR’1115th June 2011<br />Visualizing Financial Networksnew understanding of the financial system and implications for policy makers<br />Inês Salpico<br />Kimmo Soramäki<br />
  2. 2. Context: Aftermath of the financial crisis<br />Stress and increase of regulation<br />Financial System understood as a network<br />Systemic risk:<br />“too connected to fail”<br />Extended mandate(s) to collect data<br />New paradigm of data collection and analysis<br />Need to process and analyze this data<br />
  3. 3. Questions: <br />How to make sense of data?<br />
  4. 4. Questions: <br />How to make sense of data?<br />How to make data analysis actually operative in supervision and regulation?<br />
  5. 5. Theory<br />Research<br />Supervision<br />Regulation<br />New analytical paradigms<br />namely: network<br />Methods<br />Data<br />
  6. 6. Questions: <br />How to make sense of data?<br />How to make data analysis actually operative in policy and supervision?<br />How to use analysis to actually see what’s happening in the system? <br />
  7. 7. x<br />(You wish!)<br />
  8. 8. Intelligence?<br />Financial crisis are different and rare <br />
  9. 9. Intelligence?<br />Financial crisis are different and rare <br />The patterns to be recognized would have to be frequent enough for computers to learn<br />
  10. 10. The wire – video excerpt<br />
  11. 11. Intelligence?<br />AI - Artificial Intelligence<br />
  12. 12. Intelligence?<br />AI - Artificial Intelligence<br />IA - Intelligence Amplification<br />ref: William Ross Ashby (1956) in ‘Introduction to Cybernetics’<br />Tools that make data and analysis actionable for humans<br />
  13. 13.
  14. 14. Visualization<br />Tools vs. Customised Visualizations<br />Tools vs. Customised Visualizations<br />> Fusion Charts http://www.fusioncharts.com/<br />> Gephi http://gephi.org/<br />> Google Chart Tools http://code.google.com/intl/pt-PT/apis/charttools/<br />> HighCharts http://www.highcharts.com/<br />> Many Eyes (IBM) http://www-958.ibm.com/software/data/cognos/manyeyes/<br />> Protovis http://vis.stanford.edu/protovis/<br />> Tableau http://www.tableausoftware.com/<br />
  15. 15. Visualization<br />Tools vs. Customised Visualizations<br />> Information is Beautiful http://www.informationisbeautiful.net/<br />> Infosthetics http://infosthetics.com/<br />> Flowing Data http://flowingdata.com/<br />> Marumushi http://marumushi.com/tags/information+visualization<br />> Visual Complexity http://www.visualcomplexity.com/vc/<br />
  16. 16. Visualization<br />Infographics vs. Analytical Visualizations<br />Infographics vs. Analytical Visualizations<br />> Representation: Qualitative vs. Quantitative<br />> Representation: Qualitative vs. Quantitative<br />> Focus: Message vs. Data<br />> Representation: Qualitative vs. Quantitative<br />> Focus: Message vs. Data<br />> Exploration: Limited vs. Unlimited<br />
  17. 17. Europe's Web of Debt<br />Bill Marsh/The New York Times Visual Science Series , May 1, 2010 <br />
  18. 18.
  19. 19. Analysis + Visualization<br />Infographical and Analytical<br />> Qualitative and Quantitative<br />> Exploration and analysis of the raw data<br />
  20. 20. Paradigm<br />understanding<br />
  21. 21.
  22. 22. Objectives<br />Provide a tool for time series analysis of network data in finance<br />Provide a platform for building agent based and simulation models<br />Make advances in research available to policy<br />Based on 7 years of research with Central Banks<br />Focus on ease of use, performance and flexibility<br />
  23. 23. FNA demo – video excerpts<br />
  24. 24. FNA<br />Platform for <br />Exploring <br />Analyzing<br />Visualizing <br />financial networks <br />
  25. 25. Versions<br /><ul><li>Web
  26. 26. Cloud service
  27. 27. REST API (for accessing FNA engine from web applications)
  28. 28. Intranet
  29. 29. Operative use
  30. 30. Integration to databases and user management
  31. 31. Browser based GUI
  32. 32. Desktop
  33. 33. By demand, academic use
  34. 34. Command line version available
  35. 35. Integration with external programs like Matlab, Stata, Excel, etc.</li></li></ul><li>Thank you<br />More information<br />www.financialnetworkanalysis.com<br />Contact us<br />kimmo@soramaki.net<br />ines@soramaki.net<br />

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