homogeneous banking system (banks with identical preferences and the same size of total assets) with interconnectedness: banks own … shares in each others' assets. Using these simplifications we derive an analytically tractable indicator for systemic risk … volatility of the assets and decreasing the level of equity both raises systemic risk. Furthermore, interconnectedness in the …

homogeneous banking system (banks with identical preferences and the same size of total assets) with interconnectedness: banks own … shares in each others' assets. Using these simplifications we derive an analytically tractable indicator for systemic risk … volatility of the assets and decreasing the level of equity both raises systemic risk. Furthermore, interconnectedness in the …