Assessing financial market infrastructures’ systemic importance with authority and hub centrality

Two information retrieval measures, authority centrality and hub centrality, are implemented to assess the systemic importance of Colombian financial market infrastructures. Unlike standard centrality measures (eg, degree, strength, eigenvector), authority and hub centrality allow for assessing financial market infrastructures' global importance as the mutually reinforcing centrality arising from nodes pointing to other nodes (ie, hubs) and from nodes being pointed to by other nodes (ie, authorities), despite the strictly hierarchical (ie, directed and acyclic) nature of the networks they comprise. Our results verify the systemic importance of the only large value payment system and the sovereign securities' main settlement system and central depository, the foremost authority-central and hubcentral financial market infrastructures, respectively. This paper contributes to financial stability and systemic risk literature with a macroprudential perspective of infrastructure-related risk.