Morteza Alaeddini

Composition of the Jury

Abstract

Interbank money markets (IMM) are one of the most complex systems in the fields of banking and monetary policy, particularly when central banks intervene in the markets. An IMM is a short-term money market that allows banks to borrow and lend money at interbank rates. Funds are transferred through the purchase and sale of highly liquid short-term debt instruments (secured loans) or based on the creditworthiness of counterparties (unsecured loans). One way to reduce the complexity of a system with these characteristics could be to use agent-based modeling (ABM). ABM provides a computational representation of a set of micro-entities (i.e., agents) that interact with one another and evolve over time to form a macro-system. The proposed model uses a blockchain consensus algorithm to assess the creditworthiness of borrowing banks in order to maximize market confidence and thereby overcome instability during times of crisis.

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