On the Distribution of Links in the Interbank Network: Evidence from the e-Mid Overnight Money Market

Previous literature on statistical properties of interbank loans has

reported various power-laws, particularly for the degree distribution

(i.e. the distribution of credit links between institutions). In this

paper, we revisit data for the Italian interbank network based on

overnight loans recorded on the e-MID trading platform during the

period 1999-2010 using both daily and quarterly aggregates. In con-

trast to previous authors, we find no evidence in favor of scale-free

networks. Rather, the data are best described by negative Binomial

distributions. For quarterly data, Weibull, Gamma, and Exponential

distributions tend to provide comparable ?ts. We find comparable re-

sults when investigating the distribution of the number of transactions,

even though in this case the tails of the quarterly variables are much

fatter. The absence of power-law behavior casts doubts on the claim

that interbank data fall into the category of scale-free networks.