China's Banking System Faces Non-Trivial Amplification Effects of Financial Interlinkage
The article examines the risk of financial contagion in China's banking system. Researchers analyzed data from individual banks' balance sheets and interbank connections to assess the potential impact of a bank failure. They found that while the risk of one bank failing is low, the interconnectedness of banks could amplify losses. Certain banks were identified as particularly important in this network. The study aims to help prevent systemic risks and improve oversight in China's banking sector.