Interconnections among financial institutions create potential channels for contagion and amplification of shocks to the financial system. We estimate the extent to which interconnections increase expected losses, with minimal information about network topology, under a wide range of shock...

This paper studies the spread of losses and defaults in financial networks with two interrelated features: collateral requirements and alternative contract termination rules, which control access to collateral. When collateral is committed to a firm's counter-parties, a solvent firm may default...

This paper studies the spread of losses and defaults in financial networks with two important features: collateral requirements and alternative contract termination rules in bankruptcy. When collateral is committed to a firm's counterparties, a solvent firm may default if it lacks sufficient...