We study the interplay between two channels of interconnectedness in the banking system. The first one is a direct … interconnectedness, via a network of interbank loans, banks' loans to other corporate and retail clients, and securities holdings. The … second channel is an indirect interconnectedness, via exposures to common asset classes. To this end, we analyze a unique …

they are incorporated maintain creditor positions vis-à-vis the rest of the world. However, only the equity components of …

model. We find that a union aggregate systemic risk shock results in a sharp decline in output, with two thirds of the …