  Recently, there has been a growing interest in network research, especially
in these fields of biology, computer science, and sociology. It is natural to
address complex financial issues such as the European sovereign debt crisis
from the perspective of network. In this article, we construct a network model
according to the debt--credit relations instead of using the conventional
methodology to measure the default risk. Based on the model, a risk index is
examined using the quarterly report of consolidated foreign claims from the
Bank for International Settlements (BIS) and debt/GDP ratios among these
reporting countries. The empirical results show that this index can help the
regulators and practitioners not only to determine the status of
interconnectivity but also to point out the degree of the sovereign debt
default risk. Our approach sheds new light on the investigation of quantifying
the systemic risk.
