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Contagion in Financial Networks : Office of Financial Research , October 20, , 2015

October 20, 2015

Office of Financial Research

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From the document: "The recent financial crisis has prompted much new research on the interconnectedness of the modern financial system and the extent to which it contributes to systemic fragility. Network connections diversify firms’ risk exposures, but they also create channels through which shocks can spread by contagion. We review the extensive literature on this issue, with the focus on how network structure interacts with other key variables such as leverage, size, common exposures, and short-term funding. We discuss various metrics that have been proposed for evaluating the susceptibility of the system to contagion and suggest directions for future research."

Authors - Glasserman, Paul, Young, H. Peyton



Glasserman, Paul, Young, H. Peyton


Office of Financial Research


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