These results provide basis for understanding the financial systemic risk contagion in the real world.Īllen, F., Gale, D.: Financial contagion. Finally, the influence of the characteristics of financial network on risk contagion is verified by numerical simulation. Then, we mathematically derive an analytical form to show how these three contagion channels jointly affect and amplify the loss of the non-default institutions, and explain how the lack of liquidity of external investment assets exacerbates the loss caused by portfolio overlapping. In this paper, firstly, for a given shock, we prove the existence of the equilibrium clearing vector of the financial system characterized by these three typical financial networks. These connections among financial institutions constitute the three most common financial networks, which may lead to financial risk contagion and even systemic risk when some institutions suffer shock. This includes a 750 seat auditorium – the largest in the University.Financial institutions are typically tied together via inter-liability, portfolio overlapping and share cross-holding. The Frederick Douglass Centre at Newcastle Helix also offers further study and learning spaces. Experimental and Behavioural Economics Lab, a state-of-the-art research facility for conducting studies in experimental economics and economic psychology.Bloomberg Room to give you a real feel for the trading room floor. ![]()
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