This paper studies the scope for cross-border contagion in the European banking sector using true bilateral exposure data. Using a model of sequential solvency and liquidity cascades in networks, we analyze geographical patterns of loss propagation from 2008 to 2012. We study the distribution of...

An epidemiologist calculating the risk of a localised epidemic becoming a global pandemic would investigate every possible channel of contagion from the infected region to the rest of the world. Focusing on, say, the incidence of close human contact would underestimate the pandemic risk if the...

I show that saving gluts spur financial instability. In the US, banks locally exposed to its root causes - the rise in household wealth inequality and higher savings by intangible-intensive firms - massively increased deposits since 2000, leading to an unprecedented deposit-to-GDP ratio and to a...