Alves, Ivan; Ferrari, Stijn; Franchini, Pietro; Heam, … - 2013
' connections may result in efficient risk transfer. But in crises, connections can facilitate contagion - as initial problems lead … reluctant to lend to each other and hoard liquidity. Potential for contagion due to interconnectedness is a key component of … systemic risk. As a first step towards understanding the mechanisms of contagion, this paper abstracts from complex indirect …