The stability of the modern financial system is defined by its complex web of interconnections. This training course provides a deep dive into the cutting-edge analytical frameworks and tools used to model and measure systemic risk—the risk that a failure in one part of the system could trigger a cascade of failures across the entire network. Designed for central bank economists, financial stability analysts, and regulators, this program will demystify network theory and equip participants with the skills to identify vulnerabilities, assess contagion channels, and proactively manage threats to the financial system. This is an essential course for professionals dedicated to building a resilient and stable financial landscape.

This five-day program is a practical guide to applying network analysis to real-world financial data. We will move from foundational concepts to advanced techniques, including the use of graph theory and contagion simulations to map and analyze financial interdependence. Participants will learn how to identify systemically important institutions, assess the concentration of risk, and evaluate the impact of policy interventions in a networked environment. By the end of this course, you will be able to leverage these powerful tools to enhance your institution's surveillance capabilities and contribute to more effective macroprudential policy design.

Duration: 5 days

Target Audience:

• Central bank financial stability staff and analysts
• Bank supervisors and regulators
• Risk managers and analysts in financial institutions
• Economists and researchers in macro-finance
• Data scientists and quantitative analysts
• Treasury and fiscal policy officials
• Academics and students of financial economics
• Internal auditors and compliance officers
• International financial institution staff
• Executives responsible for strategic oversight

Objectives:

• Grasp the core concepts of systemic risk and financial interconnectedness
• Understand the principles and methodologies of network analysis
• Identify and measure different types of financial networks
• Analyze contagion channels and spillovers within the financial system
• Apply network analysis to stress testing and macroprudential policy
• Interpret and visualize complex network data
• Assess the role of non-bank financial institutions in systemic risk
• Develop a framework for communicating systemic risks to policymakers
• Evaluate the effectiveness of policy tools in a networked environment

Course Modules: Module 1: Foundations of Systemic Risk

• Defining systemic risk in the modern financial system
• Understanding sources of systemic risk: contagion, common exposures, and feedback loops
• The evolution of systemic risk in recent financial crises
• The role of interconnectedness and complexity
• Key frameworks for systemic risk analysis

Module 2: Introduction to Network Analysis

• Basic concepts of graph theory: nodes, edges, and networks
• Types of financial networks: credit, payments, and funding
• Measuring network characteristics: density, centrality, and clustering
• The use of network visualization tools
• Data sources for constructing financial networks

Module 3: Data and Tools for Network Analysis

• Identifying and collecting data for financial network construction
• The use of open-source software and programming languages for analysis
• Cleaning and preparing data for network modeling
• Creating network representations of real-world financial systems
• The challenges of data availability and privacy

Module 4: Contagion and Spillovers

• Modeling direct contagion through interbank exposures
• The concept of fire sales and indirect contagion
• Measuring spillovers between financial sectors and markets
• Analyzing the cascade effect of defaults and liquidity shocks
• The role of common exposures in propagating risk

Module 5: Systemic Importance and Macroprudential Policy

• Identifying systemically important financial institutions (SIFIs)
• The use of network metrics to assess systemic importance
• Applying network analysis to macroprudential policy design
• The impact of capital buffers and liquidity requirements on networks
• Policy interventions to mitigate network vulnerabilities

Module 6: Stress Testing and Simulations

• Designing network-based stress tests
• Simulating the impact of shocks on a financial network
• The use of agent-based modeling for dynamic simulations
• Calibrating models with real-world financial data
• Interpreting stress test results for supervisory action

Module 7: The Role of Non-Bank Financial Institutions

• The growing importance of the shadow banking sector
• Mapping the network of non-bank financial intermediaries (NBFIs)
• Assessing the unique risks posed by NBFIs
• Analyzing the interconnectedness between banks and NBFIs
• The policy challenges of regulating the shadow banking sector

Module 8: Communicating Risk and Policy

• Presenting complex network analysis to policymakers
• Visualizing systemic risk for effective communication
• The role of central bank publications and financial stability reports
• Building consensus on policy actions based on model results
• The ethical considerations of using network models

Module 9: Case Studies and Future Trends

• Analyzing network structures during the 2008 financial crisis
• The use of network analysis in managing COVID-19 related shocks
• The impact of FinTech and digital innovation on financial networks
• The future of systemic risk modeling and analysis
• International cooperation and harmonizing methodologies

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 7 working days before commencement of the training.