# Reconstruction of Interbank Network using Ridge Entropy Maximization Model

@article{Ikeda2020ReconstructionOI, title={Reconstruction of Interbank Network using Ridge Entropy Maximization Model}, author={Yuichi Ikeda and Hidetoshi Takeda}, journal={arXiv: General Economics}, year={2020} }

We develop a network reconstruction model based on the entropy maximization considering the sparsity of network. Here the reconstruction is to estimate network's adjacency matrix from node's local information. We reconstruct the interbank network in Japan from financial data in balance sheets of individual banks using the developed reconstruction model in the period from 2000 to 2016. The sparsity of the interbank network is successfully reproduced in the reconstructed network. We examine the… Expand

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