New understanding of the financial system and implications for policy makers (with Ines Salpico)

1. VISUALIZAR’1115th June 2011 Visualizing Financial Networksnew understanding of the financial system and implications for policy makers Inês Salpico Kimmo Soramäki

2. Context: Aftermath of the financial crisis Stress and increase of regulation Financial System understood as a network Systemic risk: “too connected to fail” Extended mandate(s) to collect data New paradigm of data collection and analysis Need to process and analyze this data

3. Questions: How to make sense of data?

4. Questions: How to make sense of data? How to make data analysis actually operative in supervision and regulation?

5. Theory Research Supervision Regulation New analytical paradigms namely: network Methods Data

6. Questions: How to make sense of data? How to make data analysis actually operative in policy and supervision? How to use analysis to actually see what’s happening in the system?

7. x (You wish!)

8. Intelligence? Financial crisis are different and rare

9. Intelligence? Financial crisis are different and rare The patterns to be recognized would have to be frequent enough for computers to learn

10. The wire – video excerpt

11. Intelligence? AI - Artificial Intelligence

12. Intelligence? AI - Artificial Intelligence IA - Intelligence Amplification ref: William Ross Ashby (1956) in ‘Introduction to Cybernetics’ Tools that make data and analysis actionable for humans

14. Visualization Tools vs. Customised Visualizations Tools vs. Customised Visualizations > Fusion Charts http://www.fusioncharts.com/ > Gephi http://gephi.org/ > Google Chart Tools http://code.google.com/intl/pt-PT/apis/charttools/ > HighCharts http://www.highcharts.com/ > Many Eyes (IBM) http://www-958.ibm.com/software/data/cognos/manyeyes/ > Protovis http://vis.stanford.edu/protovis/ > Tableau http://www.tableausoftware.com/

15. Visualization Tools vs. Customised Visualizations > Information is Beautiful http://www.informationisbeautiful.net/ > Infosthetics http://infosthetics.com/ > Flowing Data http://flowingdata.com/ > Marumushi http://marumushi.com/tags/information+visualization > Visual Complexity http://www.visualcomplexity.com/vc/

16. Visualization Infographics vs. Analytical Visualizations Infographics vs. Analytical Visualizations > Representation: Qualitative vs. Quantitative > Representation: Qualitative vs. Quantitative > Focus: Message vs. Data > Representation: Qualitative vs. Quantitative > Focus: Message vs. Data > Exploration: Limited vs. Unlimited

17. Europe's Web of Debt Bill Marsh/The New York Times Visual Science Series , May 1, 2010

19. Analysis + Visualization Infographical and Analytical > Qualitative and Quantitative > Exploration and analysis of the raw data

20. Paradigm understanding

22. Objectives Provide a tool for time series analysis of network data in finance Provide a platform for building agent based and simulation models Make advances in research available to policy Based on 7 years of research with Central Banks Focus on ease of use, performance and flexibility

23. FNA demo – video excerpts

24. FNA Platform for Exploring Analyzing Visualizing financial networks

26. Cloud service

27. REST API (for accessing FNA engine from web applications)

28. Intranet

29. Operative use

30. Integration to databases and user management

31. Browser based GUI

32. Desktop

33. By demand, academic use

34. Command line version available