PREVENTING CONTAGION IN FINANCIAL MARKETS. AN ANALYSIS OF THE CONTROLLED FINANCIAL RISK WITH TIME DELAY

The article analyses the evolution of the financial risk contagion considering a mathematical model with time delay using the occurrence value, the analyzed value and the controlled value of the risk. The aim of the paper is to find the equilibrium point and the necessary conditions for its asymptotic stability. The existence of the oscillatory solutions is studied, taking the time delay as a bifurcation parameter. To verify the theoretical findings, numerical simulations are carried out. Conclusions show that financial risks can be controlled and the appropriate moment when measures should be taken to prevent contagion can be determined. Financial explanations and discussions are provided throughout the paper as support for the mathematical model and its practical use.