SHM and Global Financial Stability: An Analysis of Systemic Risk and Structural Health Monitoring in Financial Markets

Here is a professional and academic abstract in English, tailored for the Zenodo "Description" field to ensure high visibility and clarity for the international research community. Abstract: SHM and Global Financial Stability Title: SHM and Global Financial Stability: Integrating Structural Health Monitoring Frameworks into Systemic Risk Assessment Abstract: This study explores the innovative cross-disciplinary application of Structural Health Monitoring (SHM) methodologies—traditionally utilized in civil and aerospace engineering—to the domain of Global Financial Stability. As global financial markets evolve into increasingly complex and interdependent networks, traditional econometric models often struggle to capture the real-time degradation of market "integrity" prior to a systemic collapse. This research proposes an analytical framework that treats the global financial architecture as a complex structure subject to stress, fatigue, and environmental shocks. Key areas of investigation include: Real-Time Anomaly Detection: Leveraging SHM sensor-data logic to identify early-warning signals in high-frequency financial data, such as abnormal liquidity patterns or asset price dislocations. Damage Prognosis and Propagation: Modeling how "localized damage" (e.g., the failure of a specific financial institution or market segment) propagates through the global network, leading to potential systemic failure. Systemic Resilience Metrics: Developing indicators to measure the "residual strength" of the financial system after macroeconomic shocks. The findings suggest that adapting SHM’s non-destructive evaluation techniques to financial monitoring can significantly enhance macroprudential supervision. By providing a more granular view of market health, this framework offers policymakers and central banks a robust toolset for mitigating contagion and ensuring long-term global financial stability.