common knowledge that some banks have incurred losses but not which ones. We develop a model that features contagion, meaning … of contagion is large, it is possible for no information to be disclosed in equilibrium but for mandatory disclosure to … increase welfare by allowing investment that would not have occurred otherwise. Absent contagion, mandatory disclosure cannot …

them but suffer losses through contagion when any agent on a path connected to them is hit by a shock. We first consider … that the completely connected network is stable, although, its exact structure, and thus contagion implications, is …