Castiglionesi, Fabio; Navarro, N. - Tilburg University, Center for Economic Research - 2007
We study a financial network characterized by the presence of depositors, banks and their shareholders. Belonging to a … financial network is beneficial for both the depositors and banks' shareholders since the return to investment increases with … the number of banks connected. However, the network is fragile since banks, which invest on behalf of the depositors, can …