Systemic risk: A network approach to big systematically important European banks.

This paper employs a network approach to examine systemic risk in major European banks, focusing on understanding contagion mechanisms within the financial system. By analyzing interbank networks, the study investigates how individual banks influence the propagation of impacts, identifies feasible contagion paths, and assesses remote vulnerability. Additionally, it quantifies the impact of bank defaults on capital buffers and conducts simulation exercises to evaluate the resilience of the financial system to shocks. Utilizing the DebtRank methodology, the paper identifies systemically important institutions and evaluates overall systemic risk.