Applications

The questions this instrument answers.

Each of the following is an illustrative example written to show the shape of the work — the question, the modelling approach and the output. None of them describes a client engagement.

Banking & market infrastructure

Tracing contagion through a counterparty network

Where an aggregate stress test reports a loss, a network simulation reports the route — and the point at which the response stops being linear.

Illustrative example

Asset management

Crowding and unwind dynamics in a factor trade

Factor relationships hold until the population of participants changes. Simulating the participants makes regime change a mechanism rather than a break in a backtest.

Illustrative example

Policy & institutional research

Policy transmission through heterogeneous balance sheets

The aggregate effect of a rate change is an average of very different responses. The distribution of those responses is usually the actual policy question.

Illustrative example

If one of these resembles a question you are carrying, the fastest way to test whether simulation is the right instrument is a specific conversation about it.

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