We provide a framework for studying the relationship between the financial network architecture and the likelihood of … socially inefficient due to the presence of a network externality: even though banks take the effects of their lending, risk … rest of the network …

of market dislocation, and systemic risk arises from a complex and dynamic network of relationships among hedge funds …

on experiences with other measurement agendas to place in perspective the challenge of quantifying systemic risk, or more …

risk. These connections lead to two different network structures. In a clustered network groups of financial institutions … hold identical portfolios and default together. In an unclustered network defaults are more dispersed. With long term … finance welfare is the same in both networks. In contrast, when short term finance is used, the network structure matters …

This chapter develops a unified framework for the study of how network interactions can function as a mechanism for … small, we provide a fairly complete characterization of the structure of equilibrium, clarifying the role of network … literature on the role of network linkages in fostering systemic risk …