Financial Contagion — Eisenberg-Noe Interbank Network

Banks hold interbank claims as assets and liabilities. When a shock hits external assets, defaults cascade. Clearing payments are fixed points of a monotone map. Click a bank to shock it.

Parameters

System State

Banks failed: 0
Contagion ratio: 0%
Total loss: 0.00
Direct defaults: 0
Cascaded defaults: 0
Eisenberg-Noe clearing:
p* = min(p̄, Π·p* + e)
Fixed point via iteration