Tag Archives: Economics


Threadneedle is a simulation framework developed to explore the behavior of the banking system. We are aiming to reproduce the behavior of banking systems using the Basel 2 and 3 Regulatory frameworks, as well as local Icelandic regulations, as exactly as possible.

The framework uses full double-entry bookkeeping for all transactions performed within the banking system, which we have documented in the paper Description of the Operational Mechanics of a Basel Regulated Banking System for validation and checking.

Threadneedle draws its name from the street in London, famous for being the site for the Bank of EnglandThreadneedle Street, London. Famous for being the site of the Bank of England.

Over the last fifty years, computer science has developed a great deal of experience in analyzing and troubleshooting distributed systems like the banking system. Viewed as a distributed system, the monetary system is an example of a relatively unusual (for computer science) closed network, where the operation of the system depends on packets of information (money) continuously circulating in the economy, and being used to determine the price signal for the economy.

By treating the banking system as a distributed system, and applying the same analytical techniques that we use when designing and engineering larger scale critical real-time systems such as the Internet, we hope to cast light on some of its ‘features’ such as the periodic credit crises that have afflicted western economies in the three hundred years since the effective introduction of modern banking.

Research on Modern Banking Systems and Economic Theory Presented by Dr. Jacky Mallett

Time & Location

10th of June, 2011 at 13:00, in Reykjavik University, Betelgás (Venus, 1st floor)

Dr. Jacky Mallet, Ph.D. graduate from MIT, will be holding a talk at Reykjavik University on her research on modern banking systems and economic theory. Using complex dynamic systems, her computer simulations have yielded evidence challenging some of the assumptions on which modern economic theories are based.

A number of deficiencies in the textbook model of the banking system’s behaviour will be demonstrated in the talk, titled Analysing the Behaviour of the Textbook Fractional Reserve Banking Model as a Complex Dynamic System.

Brought to you by the Icelandic Institute for Intelligent Machines and
the Center for Analysis & Design of Intelligent Agents

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