Assessing Contagion Risk in the Maltese Financial Sector: A Network Model Approach
SEPTEMBER 25, 2020

Interconnectedness between financial institutions is a source of systemic risk. Transmission channels make institutions interconnected and susceptible to the same shocks.

This paper focuses on the first channel of systemic risk, i.e. contagion arising from direct exposures to the failing institution and takes the analysis a step further by considering losses due to indirect exposures.