We investigate the propagation of contagion through banks' balance sheets in a two-country model. We simulate an increase in non-performing loans in one bank, and study the effects on other banks and the macro economy of each country. We show that credit crunches destabilize each economy in the...

Preface -- The post-crisis regulatory landscape : an overview -- Regulatory issues in the aftermath of the crisis -- Financial regulation as a response to corruption and fraud -- The war on regulation : REH, WC, GM and all that -- The efficient market hypothesis as a weapon of mass destruction...