All Together in the Quicksand?
The recent Wall Street meltdown has shown how contagion can spread quickly from one bank to another during a financial crisis. As a consequence, what really scares markets is not the stand-alone risk of insolvency, but rather the likelihood of a domino effect which would endanger a significant portion of the banking system. A research report issued by Bocconi CAREFIN analyzes the risk of joint default in US banks