contagion and aggregate losses in a stylized financial system. Systemic instability is explored in a financial network …

Common asset holdings are widely believed to have been the primary vector of contagion in the recent financial crisis …. We develop a network approach to the amplification of financial contagion due to the combination of overlapping … effects, and as a result financial contagion gets worse with too much diversification. There is a critical threshold for …

We study the problem of interacting channels of contagion in financial networks. The first channel of contagion is … contagion is overlapping portfolio exposures; this is studied using a stylized model. We perform stress tests according to … different protocols. For the parameters we study neither channel of contagion results in large effects on its own. In contrast …

We consider a model of contagion in financial networks recently introduced in Gai, P. and Kapadia, S. [Contagion in …, heterogeneous balance sheet size and degree correlations between banks. We study the probability of contagion conditional on the … heterogeneous degree distributions are shown to be more resilient to contagion triggered by the failure of a random bank, but more …

October 2009 and July 2012. Channels of shock transmission from or to sovereigns and banks are summarized in a Contagion Index … sovereigns. We also highlight the impact of policy-related events on the Contagion Index. …