Systemic risk in the financial system is influenced by factors like bank capitalization, interbank connections, and system concentration. Well-capitalized banks make the system more resilient to defaults. Increasing connectivity initially raises contagion risk, but beyond a certain point, it helps absorb shocks. Larger interbank liabilities increase default risk. More concentrated banking systems are more prone to systemic risk. Liquidity effects and asymmetry in banking structure can also impact systemic breakdown. These findings have important implications for public policy.