Stability and Complexity in Model Banking Systems
Complexity and Systemic Risk: Hilary Term Seminar Series 2010
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The Effects of Liquidity on the System
In the simplest of models, if you just assume there are things called assets and they're all equally effective, it's far too simple. And to do that, the liquidity of shocks, once they arise, affect every bank in the system. You can have interbank shocks from people to falling on their loans or liquidity shocks through assets being devaluated. All three can come together and Sujid Kapa Dia, the Bank of England, gave a talk about some of that recently.
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