The topology of interbank payment flows

We explore the network topology of the interbank payments transferred between commercial banks over the Fedwire (R) Funds Service. We find that the network has both a low average path length and low connectivity. The network includes a tightly connected core of banks to which most other banks connect. The degree distribution is scale free over a substantial range. We find that the properties of the network changed considerably in the immediate aftermath of the events of September 11, 2001. (c) 2007 Published by Elsevier B.V.