What the study found
The study found that fund holding networks among financial institutions significantly exacerbate systemic financial risk. The authors also report that governance convergence, synchronized share prices, and asset homogeneity are key mechanisms in this effect.
Why the authors say this matters
The authors conclude that the findings provide empirical support for reducing systemic financial risk by strengthening corporate governance within financial institutions, improving the quality of information disclosure, and enhancing supervision over fund shareholdings. They also suggest that limiting or reducing concentration in fund holdings may lessen the network's impact on systemic risk.
What the researchers tested
The researchers constructed a fund holding network among financial institutions using data from listed financial institutions from 2013 to 2024. They then empirically analyzed how this network is related to systemic financial risk and examined possible underlying mechanisms.
What worked and what didn't
Higher centrality in the fund holding network was associated with greater influence on systemic risk. The network appears to amplify systemic risk through governance convergence, stock price synchronicity, and homogenization of asset structure; stronger internal governance and better information disclosure were linked with mitigation of this risk.
What to keep in mind
The summary does not describe the study's limitations in detail. The findings are based on listed financial institutions in China over 2013 to 2024, so the scope is limited to that setting.
Key points
- Fund holding networks among financial institutions were found to significantly exacerbate systemic financial risk.
- Governance convergence, synchronized share prices, and asset homogeneity were identified as key mechanisms.
- Financial institutions with higher network centrality had greater influence on systemic risk.
- Better governance and information disclosure were linked with lower systemic financial risk.
- High concentration of fund ownership was reported to aggravate risk.
Disclosure
- Research title:
- Fund holding networks heighten systemic risk in financial institutions
- Authors:
- Kaiwei Jia, Longhe Yin
- Institutions:
- Liaoning Technical University, University of International Business and Economics
- Publication date:
- 2026-03-07
- OpenAlex record:
- View
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