financial system to minimize potential contagion losses. Building on ideas from combinatorial optimization tailored to … controlling contagion in case of complete information about an interbank network, we augment the model with three plausible types … contagion losses and the policy authority's ability to control them depend on the assumed fire sale mechanism and the fiscal …

This paper tests financial contagion due to interbank linkages. For identification we exploit an idiosyncratic, sudden … contagion is higher for banks with weaker fundamentals. Third, interbank linkages among surviving banks further propagate the … linkages act as an important channel of contagion and hold important policy implications. …

This paper examines common regulation as cause of interbank contagion. Studies based on the correlation of bank assets … and the extent of interbank lending may underestimate the likelihood of contagion because they do not incorporate the fact …

exists. In equilibrium, banks' rational expectations of a bailout ensure that no equity is issued and the sovereign-bank loop …

both cross-country spill-overs and contagion are important factors for driving financial crises. A parsimonious model with …