Table 1.

The model's key parameters, variables and acronyms.

category	definition	symbol	default value	notes
	number of banks	N	25
balance sheet parameters for individual banks	total assets of each bank	a	1
	IB loans	l	0.2
	lending ratio l/a	θ	0.2
	external assets	e	0.8	e = 1 − θ
	net worth or capital buffer	γ	0.04
IB lending network parameters	average value of loan	w	0.042	w = θ/z
	probability of bank A lending to bank B (Erdos–Renyi probability)	p	0.2
	average number of IB loans (‘mean degree’ of IB network)	Z	4.8	z = p(N − 1)
external asset class parameters	mean number of external asset classes held by each bank, of which c are shared each with g other banks	n (c, g)	5 (5,5)
	for a given asset, fraction of total asset value held by failing banks	x	variable
	simple liquidity shock, caused by discounting assets held by failing banks	LS	α = 2	asset values discounted by a factor e–αx
	more details on liquidity shocks (see text)
	SLS	SLS	α = 2	as above
	WLS	WLS	β = 0.5	discount factor e–βx