A02 · METHODS · stemGRA dossier · service level R0
GRABanking NexusEstablished
STEM foundation

STEM foundation of Banking Nexus

The science, technology, engineering and mathematics Banking Nexus rests on. Each method has a canonical page in the STEM Commons, hosted by GCRI, and a page here on how it is applied in this field.

Open Financial economics for banking risk Back to Banking Nexus
Publisher
The Global Risks Alliance
Field
Financial stability, Capital markets and investment, Climate and hazards
Status
Established
Service level
R0: information and enquiries

Method registry

Banking · 6 methods in use

Reviews currentGRA · Banking Nexus

Methods in use

Financial economics and…14HindcastQ2Current
Probability and statistics5Cross-validationQ3Review due
Network science and contagion12HindcastQ2Current
Financial and risk engineering8BenchmarkQ2Current
Artificial intelligence and…7Cross-validationQ2Current

Selected method

Method
Financial economics and…
Steward
Chief risk officer
Assumptions
stated on its page
Limits
what it cannot say, published

Skill on held-out data

050100score 0 to 1 by method, illustrativeFinancial…Probability…Network…Financial…Artificial…

Banking Nexus · Method registryMethod registry, in outline: domain structure with placeholder names and illustrative values, not a record.

01In brief

The short answer.

The Banking Nexus STEM foundation is the set of canonical methods its findings depend on, from financial economics and macro-finance to artificial intelligence and machine learning. Each method has a canonical STEM Commons page and a page here on its use in the financial stability field.

02Canvas

Methods feeding this platform.

Canvas · methods feeding this platformDesign, not a record
STEM foundation of Banking Nexus: bank stress testA scenario is designed and the balance sheet projected; credit losses, net interest income and market losses are estimated; capital ratios are compared with the hurdle, management actions considered and the supervisor reviews. Design of the process, not a record of a run.

Fig.The methods this platform draws on and what each one feeds. Design, not a record.

03Geography

Activity and exposure in Western Europe.

For STEM foundation of banking nexus, in GRA's spatial-finance reading, the map opens on night lights and population density with built-up and settlement extent from NASA GIBS, framed on Western Europe; every other NASA layer, live feed and forecast waits in the layer list.

The interactive map needs JavaScript; the layer list and sources are below.

Layers 2

Activity and exposure, for this page

Latest available

NASA GIBS / EOSDIS · ASTER GDEM (METI, NASA) · Blue Marble (NASA) · © OpenStreetMap contributors (ODbL) · Natural Earth

Loading the latest NASA imagery.

Drag to move. Ctrl or ⌘ and scroll, pinch or the buttons to zoom; hover for the values under the pointer; reset returns to the region.

For STEM foundation of banking nexus, in GRA's spatial-finance reading, the map opens on night lights and population density with built-up and settlement extent from NASA GIBS, framed on Western Europe; every other NASA layer, live feed and forecast waits in the layer list.Satellite and model products as NASA publishes them, each with its own date; indicators, not assessments of any place; claim ceiling INTEGRATED.

Data: NASA GIBS · ASTER GDEM · Blue Marble · © OpenStreetMap contributors · Natural Earth · GDACS · CIESIN/Columbia, NASA SEDAC HBASESources and licences

  • We acknowledge the use of imagery provided by services from NASA's Global Imagery Browse Services (GIBS), part of NASA's Earth Science Data and Information System (ESDIS). Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • We acknowledge the use of imagery provided by services from NASA's Global Imagery Browse Services (GIBS), part of NASA's Earth Science Data and Information System (ESDIS). Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • VIIRS Black Marble night-time lights, NASA Goddard Space Flight Center; distributed by the NASA Level-1 and Atmosphere Archive and Distribution System (LAADS DAAC); imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • Center for International Earth Science Information Network (CIESIN), Columbia University. 2018. Gridded Population of the World, Version 4 (GPWv4): Population Density, Revision 11. NASA Socioeconomic Data and Applications Center (SEDAC). Licensed under CC BY 4.0. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). CC BY 4.0
  • VIIRS near-real-time products (flood, land surface temperature, snow cover, corrected reflectance), NASA LANCE; imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • GPM IMERG precipitation, NASA Precipitation Processing System; distributed by the NASA Goddard Earth Sciences Data and Information Services Center (GES DISC); imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • GHRSST Level 4 MUR analyses, NASA Jet Propulsion Laboratory; distributed by the NASA Physical Oceanography DAAC (PO.DAAC); imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • ASTER GDEM is a product of METI and NASA (ASTER Global Digital Elevation Model V003, NASA LP DAAC); imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • Made with Natural Earth. Free vector and raster map data @ naturalearthdata.com. Public domain
  • © OpenStreetMap contributors (ODbL), via NASA GIBS (coastlines, boundaries, roads and place names). Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). ODbL
  • Blue Marble, NASA Earth Observatory; imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • Context on the globe and flat map: coastlines, boundaries, roads and place names from NASA GIBS reference layers (OpenStreetMap data, ODbL, © OpenStreetMap contributors); Blue Marble imagery as an optional base; 3D terrain and the elevation read-out from the ASTER GDEM elevation colour index (5 m to 200 m classes, exaggerated for legibility). Boundaries are drawn as published and imply no position on any territory.
  • Globe: MapLibre GL JS 6.9.1, BSD-3-Clause, © MapLibre contributors.
  • Live: GDACS (EC JRC / UN OCHA) Events are indicative, not official warnings.
  • Context: CIESIN/Columbia, NASA SEDAC HBASE. Center for International Earth Science Information Network (CIESIN), Columbia University, and NASA Socioeconomic Data and Applications Center (SEDAC): Global Human Built-up And Settlement Extent (HBASE) 2010; Seto, Guneralp and Hutyra 2012, Global Grid of Probabilities of Urban Expansion to 2030; Global Urban Heat Island (UHI) Data Set, 2013.
  • Optional layers (35 sources in the layer list: live, forecast, observed and context) print their provider credit on the map and here when switched on; forecasts are model output and derived indices are estimates.

Layers and dates

  • Night-time lights, daily: VIIRS Black Marble (VNP46A2), NASA LAADS DAAC · 12 Oct 2026
  • Population density, 2020: Population: CIESIN, Columbia University, Gridded Population of the World v4.11 (2018), NASA SEDAC, CC BY 4.0 · static
  • Flood water, 3-day composite: VIIRS Global Flood Product, NASA LANCE · 14 Oct 2026
  • Land surface temperature, day, 8-day composite: VIIRS NOAA-20 Level 3, 8-day, NASA LANCE · 14 Sep 2026
  • Precipitation rate, daily mean: GPM IMERG, NASA GES DISC · 12 Oct 2026
  • Sea surface temperature anomaly: GHRSST MUR25, NASA JPL PO.DAAC · 12 Oct 2026

04Methods

The methods behind the field.

  1. Financial economics and macro-financeMacro-financial stress scenarios · Credit cycle and buffer calibrationSteward · Financial StabilityApplied here
    Canonical · STEM Commons
  2. Probability and statisticsEstimating default and loss parameters · Operational loss modellingSteward · Systems Science and ModellingApplied here
    Canonical · STEM Commons
  3. Network science and contagionInterbank and counterparty contagion · Overlapping portfolios and fire salesSteward · Systems Science and ModellingApplied here
    Canonical · STEM Commons
  4. Financial and risk engineeringExpected credit loss modelling · Counterparty exposure and valuation adjustmentsSteward · Actuarial and Quantitative RiskApplied here
    Canonical · STEM Commons
  5. Artificial intelligence and machine learningCredit decisioning with explainability · Early warning and transaction monitoringSteward · Artificial Intelligence and Autonomous SystemsApplied here
    Canonical · STEM Commons
05Methods

The STEM methods Banking Nexus applies, and why.

Each Banking Nexus method is described once in the STEM Commons at GCRI and applied here to credit, collateral, liquidity and operational channels from physical and transition shocks.

06Why it matters

Grounding makes claims checkable.

When a finding names the methods it depends on, a reader can see its assumptions and limits, and an expert in that method can challenge it.

07Key terms

Terms used on this page.

Each term as this page uses it. Where a standard-setting body defines the term, the wording follows that body.

TermDefinition
STEM CommonsThe shared reference of science, technology, engineering and mathematics methods for the Nexus network, hosted by GCRI, with one canonical page per method and a named steward platform.
Steward platformThe platform that maintains the canonical description of a method in the STEM Commons and reviews how other platforms apply it.
Financial economics and macro-financeFinancial economics and macro-finance study how asset prices, credit and financial institutions interact with the real economy.
Probability and statisticsProbability and statistics provide the mathematical framework for describing uncertainty and learning from data.
08Sources

Where this page's references lead.

The bodies and documents this page is read against. Status and editions change; each link goes to the issuing body.

09Pages

Pages in STEM foundation of Banking Nexus.

Method

Financial economics for banking risk

Method

Statistics for bank risk measurement

Method

Network science for banking contagion

Method

Financial and risk engineering in banks

Method

Machine learning in banking

10Questions

Questions and answers.

What is a steward platform?
The platform that maintains the canonical description of a method and reviews how it is applied across the Consortium.
Related

Around Banking Nexus.

Banking Nexus

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