We construct a variety of social network measures within the global banking system, using the board connections from banks in 16 countries between 2000 and 2010. We show that connected banks partner more often in the syndicated loan market and that central
banks in the network play dominant roles in various interbank transactions, indicating that social connections facilitate business connections. However, consistent with “group-think” concerns, we find that the more central banks in the network contribute significantly to the systemic risk of the global banking system, suggesting there may also be a downside to having a strong social network.
Key words: Top global banks, director social networks, pairwise connection, network centrality, loan syndication, interbank transactions, systemic risk, financial crisis
JEL classification: G20, G24, G28
