{"schema_version":1,"experiment_id":"eoa_inverse_innovation_exp11_mechanism_context_external20_20260804","research_id":"eoa_inverse_innovation_exp11_external_scrutiny_20260804","cell_id":"invariant_mode_decomposition_design__economics_finance","opaque_id":"invariant_mode_decomposition_design__economics_finance__B","search_lanes":{"direct_problem":{"queries":["dealer balance sheets joint deleveraging funding liquidity fire sales systemic risk","site:bis.org dealer funding liquidity stress market making balance sheets fire sales report","site:finra.org broker-dealer liquidity stress testing funding risk management notice","liquidity spiral margins funding market liquidity Brunnermeier Pedersen official paper"],"source_ids":["SRC3","SRC5","SRC6","SRC7"],"no_result_note":null},"closest_prior_art":{"queries":["\"dynamic mode decomposition\" systemic risk finance liquidity","Koopman operator financial systemic risk balance sheet","eigenmode analysis financial contagion deleveraging liquidity","systemic risk eigenvalue shock transmission matrix liquidity deleveraging intervention"],"source_ids":["SRC1","SRC2","SRC6"],"no_result_note":null},"historical_terminology":{"queries":["procyclical leverage financial intermediaries balance sheet aggregate liquidity Adrian Shin paper","liquidity spiral margins funding market liquidity Brunnermeier Pedersen official paper","broker-dealer short-term funding fire sale externality","leverage cycle margin spiral dealer liquidity"],"source_ids":["SRC3","SRC5"],"no_result_note":null},"products_practices_standards":{"queries":["site:bis.org Basel liquidity coverage ratio net stable funding ratio standard broker dealer liquidity","site:finra.org broker-dealer liquidity stress testing funding risk management notice","site:ecb.europa.eu system-wide stress test fire sales funding liquidity banks eigenvalue","financial supervisor dealer off-site liquidity monitoring early warning"],"source_ids":["SRC3","SRC4","SRC6","SRC7"],"no_result_note":null},"non_english_regional":{"queries":["Banken gemeinsame Bilanzverkürzung Refinanzierungsliquidität Notverkäufe systemisches Risiko","risque systémique désendettement simultané banques liquidité financement ventes forcées","金融機関 同時 デレバレッジ 流動性 資産 売却 システミックリスク","liquidez financiamiento desapalancamiento ventas forzadas riesgo sistémico bancos"],"source_ids":["SRC6","SRC7"],"no_result_note":null},"composition_subproblems":{"queries":["randomized trial bank liquidity buffer HQLA funding maturity intervention","stepped wedge randomized trial financial regulation banks liquidity","dealer balance sheet dynamic mode decomposition out-of-sample liquidity alert","systemic risk eigenvalue shock transmission matrix liquidity deleveraging intervention"],"source_ids":["SRC1","SRC2","SRC4","SRC8"],"no_result_note":"No public real-dealer cluster-randomized trial of mode-targeted HQLA additions or liability terming was located; the retained experimental source uses a stylized laboratory interbank market."}},"sources":[{"source_id":"SRC1","title":"Evaluation of systemic risk in a financial system using dynamic mode decomposition","url":"https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6031928","publisher":"SSRN; authors affiliated with Nara Institute of Science and Technology","date_or_year":"2026-01-07","source_type":"PRIMARY_RESEARCH","language":"English","claims_supported":["Very close prior art applies dynamic mode decomposition to systemic-risk evaluation.","It approximates U.S. financial-system dynamics from major institutions' banking statements and market data with a Koopman operator.","It formulates instability using Koopman-operator eigenvalues and compares the metric with existing methods.","It does not report the proposal's fixed-dealer liquidity panel, sealed prospective alert comparison, or randomized modal interventions."]},{"source_id":"SRC2","title":"Scenario-free analysis of financial stability with interacting contagion channels","url":"https://www.sciencedirect.com/science/article/pii/S0378426622002643","publisher":"Journal of Banking & Finance / Elsevier","date_or_year":"2023","source_type":"PRIMARY_RESEARCH","language":"English","claims_supported":["A shock-transmission matrix jointly represents funding contagion, counterparty risk, overlapping portfolios, and deleveraging.","Its leading eigenvalue supplies a stability criterion, closely matching the proposal's eigenmode-and-gain lever.","The model explicitly connects valuation shocks, deleveraging, liquidity shocks, and forced asset sales.","It is a calibrated analytical framework rather than an empirically learned dealer transition operator or randomized policy evaluation."]},{"source_id":"SRC3","title":"Funding and Liquidity","url":"https://www.finra.org/rules-guidance/key-topics/funding-liquidity","publisher":"Financial Industry Regulatory Authority","date_or_year":"Current topic page; guidance listed from 1999 through 2025","source_type":"OFFICIAL_GUIDANCE","language":"English","claims_supported":["Funding can become prohibitively expensive or unavailable to broker-dealers under firm-specific or systemic stress.","FINRA expects broker-dealers to maintain robust funding and liquidity risk-management practices and conduct market-wide and idiosyncratic stress tests.","FINRA reviews member firms' funding and liquidity practices, identifying a concrete supervisory adopter and review authority.","Existing practice is primarily firm-level stress testing and contingency planning, not the proposed joint modal alert."]},{"source_id":"SRC4","title":"LCR30: High-quality liquid assets","url":"https://www.bis.org/basel_framework/chapter/LCR/30.htm","publisher":"Basel Committee on Banking Supervision, Bank for International Settlements","date_or_year":"2019","source_type":"OFFICIAL_STANDARD","language":"English","claims_supported":["The Liquidity Coverage Ratio requires banks to hold unencumbered high-quality liquid assets against 30-day stressed net cash outflows.","The proposed HQLA intervention uses an established prudential instrument rather than a new intervention class.","The standard recognizes that stressed monetization and fire-sale discounts affect whether assets supply reliable liquidity.","The standard does not establish a two-percent mode-targeted randomized dealer treatment."]},{"source_id":"SRC5","title":"Market Liquidity and Funding Liquidity","url":"https://www.nber.org/papers/w12939","publisher":"National Bureau of Economic Research","date_or_year":"2007-02","source_type":"PRIMARY_RESEARCH","language":"English","claims_supported":["Dealer funding liquidity and market liquidity can reinforce one another through margin and loss spirals.","The framework explains sudden market-liquidity dry-ups and commonality across securities.","This establishes longstanding terminology and theory for the coupled deleveraging problem, while not supplying the proposed empirical modal detector."]},{"source_id":"SRC6","title":"Integrating contagion risk into the 2025 EU-wide stress test: a system-wide analysis with amplification effects between banks and non-banks","url":"https://www.ecb.europa.eu/press/financial-stability-publications/macroprudential-bulletin/html/ecb.mpbu202511_03.de.html","publisher":"European Central Bank","date_or_year":"2025-11","source_type":"OFFICIAL_GUIDANCE","language":"English via ECB German regional route","claims_supported":["The ECB's ISA framework combines granular institution-level exposures and holdings to quantify system-wide second-round effects missed by sectoral analysis.","Liquidity shortfalls can induce redemptions and fire sales, producing price declines and cascading losses.","The work identifies supervisors and macroprudential authorities as operational adopters of system-wide monitoring.","ISA is scenario- and network-simulation-based, not a learned invariant-mode alert or randomized dealer intervention."]},{"source_id":"SRC7","title":"Comprehensive Guidelines for Supervision of Financial Instruments Business Operators: Supervisory Evaluation Items and Procedures for Type I Financial Instruments Business","url":"https://www.fsa.go.jp/common/law/guide/kinyushohin/04a.html","publisher":"Financial Services Agency of Japan","date_or_year":"Current guidance accessed 2026-08-04","source_type":"OFFICIAL_GUIDANCE","language":"Japanese","claims_supported":["Japanese supervisory guidance distinguishes funding-liquidity risk from market-liquidity risk for securities firms.","It calls for daily and medium-term funding management, asset limits, contingency funding capacity, and assigned authority.","It describes monthly off-site monitoring, hearings, reporting demands, stress tests, and early-warning responses, demonstrating a regional supervisory adopter and established monitoring practice.","Its early-warning framework uses predefined firm-level indicators rather than joint dynamic modes."]},{"source_id":"SRC8","title":"Liquidity requirements and the interbank loan market: An experimental investigation","url":"https://www.sciencedirect.com/science/article/pii/S0304393219300960","publisher":"Journal of Monetary Economics / Elsevier","date_or_year":"2020","source_type":"PRIMARY_RESEARCH","language":"English","claims_supported":["A controlled laboratory interbank-market experiment evaluates minimum liquid-asset requirements under withdrawal shocks.","Liquidity requirements reduce bankruptcies but sacrifice investment efficiency under a simple shock and fail to reduce bankruptcies under a compound shock.","The mixed findings support explicit efficacy and harm gates before live liquidity-buffer interventions.","The study is not a field trial involving real dealers, supervisory data, or modal outcomes."]}],"problem_evidence":{"status":"PARTLY_SUPPORTED","finding":"The general problem is well supported: dealer funding can disappear, funding and market liquidity can form reinforcing spirals, and institution-by-institution assessments can miss system-wide amplification through correlated balance-sheet responses and fire sales. Public evidence does not yet demonstrate the proposal's narrower hypothesis that a stable, recurring, empirically learned dealer eigenmode grows while the specified firm ratios remain acceptable and adds sealed-period warning beyond both comparators.","source_ids":["SRC3","SRC5","SRC6","SRC7"],"uncertainty":"The exact fixed-dealer panel, variable definitions, recurrence, modal stability, and incremental warning performance require confidential supervisory data and prospective validation."},"adopter_evidence":{"status":"SUPPORTED","finding":"Financial supervisors are identifiable adopters and authorizers. FINRA reviews broker-dealer funding and liquidity practices; Japan's FSA conducts off-site securities-firm liquidity monitoring and can demand reports or improvements; the ECB operates system-wide stress-testing analytics for macroprudential assessment. Live balance-sheet controls would still require the competent legal supervisor and firm consent where participation is voluntary.","source_ids":["SRC3","SRC6","SRC7"],"uncertainty":"The proposal does not select a jurisdiction, so the exact statutory authority, committee approvals, and dealer population remain jurisdiction-specific."},"implementation_evidence":{"status":"PARTLY_SUPPORTED","finding":"The constituent data and policy instruments are plausible and partly established: supervisors already collect liquidity information and run stress tests, HQLA buffers are standardized, and maturity structure is a recognized liquidity concern. Dynamic-mode systemic-risk analysis and eigenvalue-based contagion analysis already exist. However, no retained source demonstrates the full implementation package: a frozen one-month dealer operator with the specified stability and predictive gates followed by a real-dealer randomized trial targeting a retained mode. Experimental evidence also shows that liquidity requirements can impose efficiency costs and fail under compound shocks.","source_ids":["SRC1","SRC2","SRC3","SRC4","SRC7","SRC8"],"uncertainty":"Confidential data completeness, dealer-panel stability, interference measurement, randomization feasibility, legal authority, treatment compliance, and client-cost effects remain unverified."},"prior_art":{"disposition":"ADJACENT_PRIOR_ART","closest_analogues":[{"name":"Zavialov and Ikeda dynamic-mode systemic-risk metric","source_ids":["SRC1"],"same_problem":true,"same_causal_lever":true,"overlap":"Uses financial-institution statements and market data, dynamic mode decomposition, a Koopman approximation, and eigenvalue-based instability criteria to assess systemic risk.","remaining_difference":"It does not isolate dealer funding-withdrawal and asset-sale states, require the proposal's frozen sealed-block alert gains, compare against both specified comparators under a common alert budget, or causally test HQLA and maturity controls on retained modes."},{"name":"Wiersema et al. scenario-free shock-transmission matrix","source_ids":["SRC2"],"same_problem":true,"same_causal_lever":true,"overlap":"Represents interacting funding, valuation, portfolio-overlap, and deleveraging channels in a matrix and uses its eigenvalue spectrum to classify systemic stability.","remaining_difference":"The matrix is structurally modeled rather than learned as a frozen local transition operator from a dealer panel; it does not provide the proposed out-of-sample warning contest or randomized modal intervention."},{"name":"ECB Interconnected System-wide Stress-test Analytics","source_ids":["SRC6"],"same_problem":true,"same_causal_lever":false,"overlap":"Uses granular institution-level data to capture liquidity shortfalls, balance-sheet reactions, fire sales, and system-wide second-round amplification that sectoral firm assessments can miss.","remaining_difference":"It is scenario-based network stress testing rather than invariant-mode decomposition, and it does not estimate causal effects of the two proposed dealer funding controls."},{"name":"Established broker-dealer liquidity monitoring and prudential buffers","source_ids":["SRC3","SRC4","SRC7"],"same_problem":true,"same_causal_lever":false,"overlap":"Supervisors already monitor dealer liquidity, require or recommend stress testing and contingency funding, and use liquid-asset and maturity-oriented prudential controls.","remaining_difference":"These practices operate mainly through institution-level indicators, scenarios, and ratios, not an empirically retained system-wide mode with preregistered modal outcome tests."}],"contrastive_claim_remaining":"In a fixed dealer panel, a prospectively frozen, bootstrap-stable joint transition mode can improve final-block liquidity-stress precision-recall area by at least 0.05 and median lead time by at least five business days over both firm thresholds and a frozen network stress test at the same alert budget; conditional on passing those gates and obtaining separate authority, randomized HQLA addition and liability terming can each reduce the preregistered risky-mode amplitude or gain by at least 10% on the stated timescale without worsening liquidity or subgroup financing costs.","contrastive_claim_falsifier":"The incremental claim fails if no mode passes the residual, direction, and spectral-gap gates; if the frozen alert misses either comparative performance threshold; if placebo or regime tests reproduce the result; or if neither randomized control produces the preregistered modal reduction, assignment is contaminated, liquidity worsens, or subgroup financing costs breach the harm threshold.","confidence":"HIGH","search_limitations":"The search was bounded to eight retained public sources. Several research pages were accessible principally through indexed abstracts or repository copies, confidential supervisory models and unpublished dealer practices are not observable, and non-English searching covered Japanese, German, French, and Spanish terminology without exhaustively covering all jurisdictions. Patent claims, proprietary vendor systems, and nonpublic trials were not assessed."},"researchability_gates":{"externally_supported_problem":{"status":"PASS","rationale":"Independent theory, official dealer guidance, and system-wide supervisory analysis support coupled funding and market-liquidity spirals, forced sales, and amplification missed by purely institution-level views, although the exact proposed mode remains hypothetical.","source_ids":["SRC3","SRC5","SRC6","SRC7"]},"identifiable_adopter_or_authorizer":{"status":"PASS","rationale":"Broker-dealer and financial-market supervisors are concrete adopters; FINRA, Japan's FSA, and the ECB demonstrate relevant monitoring and stress-testing responsibilities. Jurisdiction-specific legal approval is required for any live intervention.","source_ids":["SRC3","SRC6","SRC7"]},"distinct_testable_incremental_claim":{"status":"PASS","rationale":"Despite close DMD and eigenvalue-based systemic-risk prior art, a falsifiable increment remains in the combined sealed out-of-sample comparison and randomized effect on empirically retained dealer modes with explicit timing, magnitude, placebo, and harm gates.","source_ids":["SRC1","SRC2","SRC6"]},"bounded_next_evidence_step":{"status":"PASS","rationale":"A frozen retrospective shadow evaluation on already authorized data is bounded, reversible, and sufficient to reject the proposal before any live control. It can test data completeness, modal fidelity, stability, spectral separation, and comparative alert performance.","source_ids":["SRC1","SRC3","SRC6","SRC7"]},"no_unresolved_safety_or_authority_stop":{"status":"PASS","rationale":"The authorized first step is non-live shadow analysis. Live HQLA or maturity changes remain prohibited pending separate legal, model-risk, ethics, feasibility, and consent review; mixed experimental effects justify retaining the stated efficiency, liquidity, contamination, and subgroup-harm stops.","source_ids":["SRC3","SRC4","SRC7","SRC8"]},"adequate_search_evidence":{"status":"PASS","rationale":"All six required lanes were searched adversarially using contemporary, historical, product/standard, non-English or regional, and component-combination terminology. The eight retained sources span seven institutional or publication organizations and include five official or standards sources and four primary-research publications.","source_ids":["SRC1","SRC2","SRC3","SRC4","SRC5","SRC6","SRC7","SRC8"]}},"strict_success":true,"screen_survival":true,"remaining_research_value":"MODERATE","recommended_next_step":"Preregister and run only the frozen retrospective shadow evaluation on an authorized dealer panel. First audit variable coverage, missingness, regime continuity, confidentiality, and comparator reproducibility; then apply the stated train/freeze/sealed split and stop immediately if any residual, bootstrap-direction, spectral-gap, precision-recall, or lead-time gate fails. Treat a live randomized trial as a separate proposal requiring jurisdiction-specific legal authority, independent feasibility and ethics review, dealer consent where necessary, interference design, and a preapproved unwind plan.","world_novelty_boundary":"This bounded public search establishes neither world novelty nor absence of unpublished, proprietary, patented, or jurisdiction-specific implementations. It does not determine patentability, freedom to operate, market size, feasibility in confidential supervisory systems, or realized impact. The defensible boundary is only that close DMD, eigenvalue-contagion, system-wide stress-testing, and liquidity-control precedents exist, while the sealed comparative dealer-mode alert plus authorized randomized modal-control package was not found in the eight retained sources."}