Paper presents a mechanism for measuring stability of banking system based on the default risk of nonbanking debtors and contagion potential of banks. The approach is tested on 1,000 randomized network topologies of 40 real banks. Banking system is treated as a complex system and stability is...

This paper brings simulations of an agent-based model of liquidity flows among banks. The model presented here is built on some fundamental, well-established assumptions from the theory of banking and finance. A critical part of the paper introduces a set of base-level rules, aimed at providing...