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Although the financial systems of advanced countries have weathered numerous shocks in recent years, the events triggered by the sub-prime crisis of August 2007 have been "Super-systemic" in scope, enveloping financial institutions across the major economies as well as far away Iceland and New Zealand. In this paper, the authors apply network techniques to develop a framework for analyzing financial contagion that isolate the probability of contagion from its potential spread. The results suggest that complex financial systems may be robust-yet-fragile in nature.
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