Network approaches in modelling financial contagion: A comprehensive literature review

Wu, Fan ORCID: https://orcid.org/0009-0009-0002-7434, Liu, Anqi ORCID: https://orcid.org/0000-0002-9224-084X, Chen, Jing and Li, Yuhua ORCID: https://orcid.org/0000-0003-2913-4478 2026. Network approaches in modelling financial contagion: A comprehensive literature review. Risks 14 (11) , 250. 10.3390/risks14110250

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Abstract

Financial contagion has been a major concern for investors, regulators and policymakers following a series of financial crises. Previous studies have primarily relied on correlation-based measures to model financial contagion. However, financial markets are complex systems and modelling financial contagion risk using network analysis has become increasingly important. Network-based approaches provide powerful analytical and visualisation tools for analysing and displaying the risk contagion paths. This paper provides a comprehensive review of the literature on network approaches to modelling financial contagion. We summarise the main network methodologies that have been developed to quantify and forecast the transmission of shocks across markets and countries, with a particular focus on approaches that infer network structures from statistical relationships in financial data. By grouping the rapidly growing literature, this review highlights the strengths and the limitations of existing network-based approaches, identifies current research trends, and outlines the potential directions for future research. It provides a comprehensive reference for researchers and practitioners seeking to understand, model and forecast financial contagion from a network perspective.

Item Type:	Article
Date Type:	Published Online
Status:	Published
Schools:	Schools > Computational & Mathematical Sciences Schools > Computer Science & Informatics Schools > Mathematics
Publisher:	MDPI
ISSN:	2227-9091
Date of First Compliant Deposit:	2 November 2026
Date of Acceptance:	21 October 2026
Last Modified:	02 Nov 2026 16:00
URI:	https://orca.cardiff.ac.uk/id/eprint/190605

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