In the five years following the financial crisis, bankers have heard it all. They’ve been called crooks, cheats and much, much worse. Now, they’re being compared to a bunch of apes. Captive rhesus macaque monkeys, actually.
In a scientific insight into the financial crisis, researchers compare the banking ecosystem and its complex networks to that of a housed primate society. Bankers can learn from the chimps to help prevent another crisis, evidently.
“Admittedly, comparing monkeys to a financial system is unconventional, however, we believe the comparison is compelling,” said Fushing Hsieh, a professor of statistics and the study’s lead author. Indeed.
Researchers from University of California, Davis used network models developed to prevent societal collapse in housed primate centers and applied them to the banking system. This is where it got a bit strange. They looked at the key behaviors of each ecosystem. For monkeys, that’s mutual grooming, fighting, assisting in fights and status signals like teeth-baring. Sounds a bit like Wall Street, other than maybe the mutual grooming.
In the banking industry, the key activities were identified as interbank lending, loan syndication, bond-issuing services and insurance. Researchers then combed through the list of behaviors and activities to find the one in each ecosystem that is the most influential on relationships. In the world of the ape, it’s teeth-baring. Apparently that behavior governs long-term relationships, helping to keep a healthy status quo.
“There may not be much teeth-baring in the banking industry, however,” said UC Davis Professor Brenda McCowan. Debatable.
Meanwhile, the key activity in banking – the one critically important to the stability of the financial system – is interbank lending, according to researchers. If problems exist here, the proverbial monkey waste may soon hit the fan.
The researchers suggest studying interbank lending and how it affects other networks within banking. You can then look for key cracks in the system that are likely to foreshadow a catastrophic event, like another financial collapse, or a battle over a elm tree.