Before revision:  Yet, while financial institutions have to disclose their aggregated balance sheet data, the information on single positions is often unavailabledue to privacy issues. The resulting challenge is that of using the aggregate information to statistically reconstruct financial networks and correctly predict their higher-order properties. However, standard approaches generate unrealistically dense networks, which severely underestimate systemic risk.
After revision:  Yet, while financial institutions have to disclose their aggregated balance sheet data, the information on single positions is mostly confidential and, as such, unavailable. Standard approaches to reconstruct the network of financial interconnection produce unrealistically dense topologies, leading to a biased estimation of systemic risk.