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WASHINGTON – A late depth psychology of the 2007 financial markets of 48 country has disclose that the populace ’s finances are in the hands of just a few mutual funds , banks , and corporations . This is the first light picture of the worldwide concentration of financial power , and show out the worldwide financial system ’s exposure as it stood on the brink of the current economic crisis .
A pair of physicists at the Swiss Federal Institute of Technology in Zurich did a cathartic - based analytic thinking of the world economy as it looked in former 2007 . Stefano Battiston and James Glattfelder pull out the data from the knotty yarn that colligate 24,877 stocks and 106,141 shareholding entity in 48 countries , revealing what they called the " linchpin " of each country ’s fiscal marketplace . These backbones represented the owners of 80 percent of a country ’s market working capital , yet consisted of unusually few shareholders .
" You start off with these huge national networks that are really fully grown , quite dense , " Glattfelder said . “ From that you ’re able to … bring out the important structure in this original big web . You then realize most of the web is n’t at all authoritative . "
The most pared - down anchor exist in Anglo - Saxon country , admit the U.S. , Australia , and the U.K. Paradoxically ; these same countries are considered by economist to have the most widely - defy blood line in the human beings , with ownership of caller tending to be spread out among many investor . But while each American company may link to many owners , Glattfelder and Battiston ’s psychoanalysis find that the possessor varied little from fund to stock , mean that relatively few hands are holding the reins of the entire market .
“ If you would wait at this topically , it ’s always distributed , ” Glattfelder say . “ If you then look at who is at the end of these links , you find that it ’s the same guys , [ which ] is not something you ’d wait from the local survey . ”
Matthew Jackson , an economic expert from Stanford University in Calif. who contemplate social and economical networks , pronounce that Glattfelder and Battiston ’s approach could be used to answer more pointed interrogation about collective control and how companies interact .
" It ’s clear , reckon at fiscal contagion and recent crisis , that understanding interrelations between company and holdings is very authoritative in the hereafter , ” he said . " sure the great unwashed have some understanding of how large some of these financial institutions in the world are , there ’s some look of how entwine they are , but there ’s a big difference between having an imprint and actually have … more explicit numbers to put behind it . "
Based on their analytic thinking , Glattfelder and Battiston identified the ten investment entities who are “ big fish ” in the most countries . The biggest Pisces the Fishes was the Capital Group Companies , with major stakes in 36 of the 48 countries studied . In identifying these major players , the physicists report for petty ownership – possess stock in caller who then possess blood in another caller – in an endeavor to quantify the possible control a yield factor might have in a market .
The results raise question of where and when a company could prefer to exercise this influence , but Glattfelder and Battiston are reluctant to speculate .
" In this kind of scientific discipline , complex systems , you ’re not aiming at making predictions [ like ] … where the lawn tennis Lucille Ball will be at given place in afford time , " Battiston said . “ What you ’re try on to estimate is … the possible influence that [ an investor ] has . "
Glattfelder added that the internationality of these powerful companies seduce it difficult to judge their economical influence . " [ With ] new company bodily structure which are so big and spanning the globe , it ’s difficult to see what they ’re up to and what they ’re doing , ” he said . Large , sparse networks dominated by a few major companies could also be more vulnerable , he enounce . " In meshing speak , if those nodes fail , that has a big issue on the web . "
The results will be published in an upcoming military issue of the journal Physical Review E.
Inside Science News Service is supported by the American Institute of Physics .
