Consider a nancial network in which n nancial intermediaries, `banks' for short, are randomly linked together by their claims on each other. In the language of graph theory, each bank represents a node on the graph and the interbank exposures of bank i de ne the links with other banks. These links are directed and weighted, re ecting the fact that interbank exposures comprise assets as well as liabilities and that the size of these exposures is important for contagion analysis. Chart 1 shows an example of a directed, weighted nancial network in which there are ve banks, with darker lines corresponding to higher value links
