Visual analytics for networked-guarantee loans risk management
This addresses risk management for regulatory commissions and banks dealing with complex loan guarantee networks, though it appears incremental as it applies existing visual analytics methods to a specific financial domain.
The paper tackles the problem of systemic risk in networked-guarantee loans by proposing a visual analytics approach that consolidates five analysis tasks, such as predicting default risk and detecting high-risk patterns, and implements it with case studies on a real-world network, consulting financial experts for endorsement.
Groups of enterprises guarantee each other and form complex guarantee networks when they try to obtain loans from banks. Such secured loan can enhance the solvency and promote the rapid growth in the economic upturn period. However, potential systemic risk may happen within the risk binding community. Especially, during the economic down period, the crisis may spread in the guarantee network like a domino. Monitoring the financial status, preventing or reducing systematic risk when crisis happens is highly concerned by the regulatory commission and banks. We propose visual analytics approach for loan guarantee network risk management, and consolidate the five analysis tasks with financial experts: i) visual analytics for enterprises default risk, whereby a hybrid representation is devised to predict the default risk and developed an interface to visualize key indicators; ii) visual analytics for high default groups, whereby a community detection based interactive approach is presented; iii) visual analytics for high defaults pattern, whereby a motif detection based interactive approach is described, and we adopt a Shneiderman Mantra strategy to reduce the computation complexity. iv) visual analytics for evolving guarantee network, whereby animation is used to help understanding the guarantee dynamic; v) visual analytics approach and interface for default diffusion path. The temporal diffusion path analysis can be useful for the government and bank to monitor the default spread status. It also provides insight for taking precautionary measures to prevent and dissolve systemic financial risk. We implement the system with case studies on a real-world guarantee network. Two financial experts are consulted with endorsement on the developed tool. To the best of our knowledge, this is the first visual analytics tool to explore the guarantee network risks in a systematic manner.