The article examines how the failure of one bank could affect other banks, using data on interbank payment flows to measure the risk of contagion. The study finds that the risk of contagion in the U.S. banking system is small. The data used only include federal funds transactions, so there may be other exposures not accounted for. However, the unique data allows for direct measurement of the impact of a bank failure and any subsequent failures. The study's approach has advantages in measuring credit exposures between banks accurately.