CausalGraphX: A Counterfactual Graph Neural Network Framework for Explainable Systemic Risk Assessment

In this study, we propose a novel pipeline for generic, model-agnostic, local-level counterfactual explainability in graph neural networks (GNNs). Although counterfactual explainers capable of both adding and removing edges have emerged in recent years, the need for generic and efficient solutions remains unmet, particularly concerning qualitative explanation generation. Our approach couples progress in factual explainability with missing edge prediction models rooted in link prediction research, in order to enhance the quality, robustness and intuitiveness of explanations. A multi-faceted experimental analysis conducted on real-world and synthetic graph classification benchmarks, both binary and multi-label, demonstrates the advancements in comparison to state-of-the-art baselines across diverse metrics.

Explainable Artificial Intelligence aims to make black-box models more trustworthy by presenting, in a human-understandable manner, the elements that lead to the model's output. This involves both (i) identifying components and connections with genuine causal influence on outputs and (ii) translating such structures into an interpretable representation. For the former, we introduce CIExplainer, a novel perturbation-based method grounded in causal inference for explaining Graph Neural Networks (GNNs). CIExplainer identifies the subgraph with the highest causal effects on GNN predictions using the Potential Outcome Framework. We evaluate and compare CIExplainer on various GNN architectures (GCN, GraphSAGE, GAT, GIN) and datasets. To bridge subgraph explanations with human interpretability, we further propose G2TeXplainer, a method that transforms causal subgraphs into natural language explanations that capture both feature-level and relational information.

Credit exposure in Decentralized Finance (DeFi) is often implicit and token-mediated, creating a dense web of inter-protocol dependencies. Thus, a shock to one token may result in significant and uncontrolled contagion effects. As the DeFi ecosystem becomes increasingly linked with traditional financial infrastructure through instruments, such as stablecoins, the risk posed by this dynamic demands more powerful quantification tools. We introduce DeXposure-FM, the first time-series, graph foundation model for measuring and forecasting inter-protocol credit exposure on DeFi networks, to the best of our knowledge. Employing a graph-tabular encoder, with pre-trained weight initialization, and multiple task-specific heads, DeXposure-FM is trained on the DeXposure dataset that has 43.7 million data entries, across 4,300+ protocols on 602 blockchains, covering 24,300+ unique tokens. The training is operationalized for credit-exposure forecasting, predicting the joint dynamics of (1) protocol-level flows, and (2) the topology and weights of credit-exposure links. The DeXposure-FM is empirically validated on two machine learning benchmarks; it consistently outperforms the state-of-the-art approaches, including a graph foundation model and temporal graph neural networks. DeXposure-FM further produces financial economics tools that support macroprudential monitoring and scenario-based DeFi stress testing, by enabling protocol-level systemic-importance scores, sector-level spillover and concentration measures via a forecast-then-measure pipeline. Empirical verification fully supports our financial economics tools. The model and code have been publicly available. Model: https://huggingface.co/EVIEHub/DeXposure-FM. Code: https://github.com/EVIEHub/DeXposure-FM.