Centrality Measurement of the Mexican Large Value Payments System from the Perspective of Multiplex Networks

• Published in: Computational economics Vol. 47; no. 1; pp. 19 - 47
• Main Authors: Bravo-Benitez, Bernardo, Alexandrova-Kabadjova, Biliana, Martinez-Jaramillo, Serafin
• Format: Journal Article
• Language: English
• Published: New York Springer US 01.01.2016; Springer Nature B.V
• Subjects: Banking industry; Behavioral/Experimental Economics; Computer Appl. in Social and Behavioral Sciences; Economic models; Economic statistics; Economic theory; Economic Theory/Quantitative Economics/Mathematical Methods; Economics; Economics and Finance; Financial institutions; Math Applications in Computer Science; Mexico; Money markets; Operations Research/Decision Theory; Payment systems; Studies; Third party; Mexico; C6; Payment systems; C8; G21; Financial stability; Network modeling; G28
• ISSN: 0927-7099; 1572-9974
• DOI: 10.1007/s10614-014-9477-0

With the purpose of going further in the understanding of the payment flows among the participants in the large value payment system in Mexico, SPEI, we elaborate payment networks using historical data for a period of seven years. We conceptualize the SPEI large value payment system as a multiplex network and we study it accordingly. Based on transactions performed on a daily basis, we present three layers built on the following types of payments, i.e. transactions sent from participant to participant, from participant to third party and from third party to third party. We observe that those layers exhibit dissimilar topology: the participant to participant layer reveals the behaviour of banks settling their own obligations, which proved to be sensitive to the failure of Lehmann Brothers; the participant to third party payments layer presented stable properties; and the third party to third party layer resulted in an increasingly dense network since the system has been adopted for the settlement of low-value obligations between accountholders. In order to identify relevant players in those layers, we compare some well-known centrality measures and also a novel centrality measure specifically designed for payment systems, SinkRank. The rankings assigned by SinkRank show a low degree of coincidence across layers.