Dear all,

You are cordially invited to the Bachelor's thesis talk of Leander Besting on 28.04.2025 at 14:00h in Seminar room of I1. The title and the abstract of the talk are as follows:

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Title: Claims Trading for Least Clearing States in Financial Networks

Abstract:

The notion of a claims trade, within the financial network model of Eisenberg and Noe [1], was introduced in a recent paper by Hoefer, Ventre and Wilhelmi [2]. It studies how the legal framework of Chapter 11 bankruptcy, particularly a creditor’s ability to sell claims, can be used to stabilize a financial network from within, avoiding external, especially governmental, involvement. In this thesis we consider the novel approach of judging a claims trade’s effect based on the least clearing state and not the greatest, which is typically considered for Eisenberg-Noe networks. The least clearing state represents the outcome of a decentralized clearing process, rather than a centralized one.

To this end, we introduce a new clearing algorithm. Unlike most previous algorithms, ours computes the least clearing state.

Additionally it works on all common types of payment strategies and even possible combinations of these, where previous

algorithms only worked for one specific type of strategy. Afterwards, we look at the previous methods for finding optimal claims trades. We give pathological examples, showing that they cannot be adapted to the least clearing state, and then discuss intuitions for why they behave differently in this scenario. This is followed by a new algorithm for finding optimal claims trades, w.r.t. the least clearing state. Our claims trading algorithm works on the same strategy profiles as our clearing algorithm. In particular, this covers all payment strategies for which claims trading algorithms are known w.r.t. the greatest clearing state.
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Best regards,
Sukanya