Financial & Economic Frameworks

Status: Coming Soon

Expected: Q4 2026

Documentation Coming Soon

Overview

This domain addresses the intersection of financial systems and economic policy—tools for understanding how capital flows, risk dynamics, and market structures interact with community development and household welfare.

Technical Approach

Problems Addressed

Representative agent fiction — Standard macro models assume identical households, missing how shocks affect different wealth levels differently
Regulatory fragmentation — Basel, CECL, and stress testing requirements use different methodologies that don’t integrate cleanly
Network blindness — Bilateral exposure data is scarce; systemic risk assessment requires inference from partial information
Macro-financial disconnect — Real economy models often ignore financial frictions; financial models ignore real economy feedback
Household heterogeneity — Aggregate statistics obscure financial fragility concentrated in specific population segments

Methodological Foundations

Our frameworks build on established financial and macroeconomic methods:

Method	Application	Key References
Basel III/IV	Capital adequacy, liquidity coverage, leverage ratios	Basel Committee on Banking Supervision
CECL	Current expected credit loss provisioning	FASB ASC 326
CCAR/DFAST	Supervisory stress testing scenarios	Federal Reserve stress testing methodology
DSGE	Dynamic stochastic general equilibrium with financial frictions	Smets-Wouters, Gertler-Karadi
HANK	Heterogeneous agent New Keynesian models	Kaplan, Moll, Violante (2018)
Network Contagion	Interbank exposure and cascade dynamics	Eisenberg-Noe clearing, DebtRank
VaR/ES	Value-at-Risk and Expected Shortfall	Basel market risk standards

Analysis Outputs

Risk metrics — LCR, NSFR, capital ratios, VaR, Expected Shortfall with confidence bounds
Stress test results — Capital depletion paths under adverse scenarios
Contagion maps — Network visualization of systemic risk transmission
Macro projections — GDP, inflation, employment under policy scenarios with heterogeneous household impacts
Distributional analysis — Wealth and debt burden dynamics by household quintile
Regulatory compliance — Structured outputs aligned with supervisory reporting requirements

Appropriate Applications

Bank regulatory compliance and internal risk assessment
Macroprudential policy analysis
Central bank research on monetary transmission
Academic research on financial stability
Household financial fragility assessment
Community development financial institution (CDFI) analysis
Grant applications for financial inclusion research

Planned Capabilities

Risk Assessment Infrastructure

Systemic risk indicators with distributional decomposition
Stress testing frameworks for policy scenarios
Contagion modeling in financial networks

Macroeconomic Modeling

General equilibrium solvers with financial sector integration
Monetary-fiscal policy interaction analysis
Open economy extensions for trade and capital flows

Household Finance Analysis

Wealth distribution dynamics and mobility
Debt burden and financial fragility indicators
Access to credit and financial inclusion metrics

Development Status

Component	Status
Risk modeling core	Design Phase
Macro-financial integration	Design Phase
Household finance module	Not Started
Validation protocols	Not Started

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Khipu Research Labs — info@krlabs.dev