Build a financial network of stylised banks and funds, see who is systemically important and how a shock could travel through it.
Select an institution in the graph or the matrix to see its balance sheet, ratios and counterparties.
Click the institution whose failure would do the most damage to the system. The ranking stays hidden until you choose.
Systemic risk is the danger that trouble at one financial institution spreads through the system and damages many others, not only the one that failed. Banks, funds and clearing houses lend to each other, trade derivatives with each other and hold many of the same assets, so the financial system is really a network. This tool lets you draw that network, rank institutions by how much damage their failure would cause, and watch a shock travel through it. Every institution is a stylised archetype, such as a dealer bank or a money market fund, not a real firm.
It is the risk of a chain reaction: one institution's distress forces losses, asset sales or withdrawals on others until a large part of the system is impaired. It differs from ordinary risk because the damage does not come only from the first failure but from how institutions are connected. A small bank can be harmless on its own yet dangerous if it sits at the centre of many obligations, which is why regulators study the network and not just each balance sheet.
Through three main channels. Counterparty losses: when a borrower defaults, its lenders write off part of what they were owed. Fire sales: a stressed institution sells assets to cut leverage, prices fall, and everyone holding the same assets loses value. Funding runs: short-term lenders sense weakness, refuse to roll over and withdraw cash, forcing yet more sales. The channels reinforce each other, so contagion can be far larger than any single link suggests.
Dense links spread a small shock across many balance sheets, so each absorbs only a little and the system survives. Beyond a certain size the same links carry the shock to everyone at once and turn a few failures into many. Connectivity therefore helps against small shocks and hurts against large ones. The shock simulation lets you sweep the size of the first loss and find where a network flips from absorbing the blow to amplifying it.
No. Every institution here is a stylised archetype with round-number balance sheets, such as a dealer bank, a money market fund or a clearing house. The historical episodes use real dates and public events as context, but no figures are attached to real firms. The aim is to show mechanisms and compare network shapes, not to estimate how any actual institution would fare, so do not read the numbers as predictions.