A paper published by the Federal Reserve Bank of New York seeks to estimate how a default could ripple though the financial system, using a uniquely detailed network model.

Fernando Duarte and Collin Jones overcome shortcomings in the data by estimating an upper bound on default spillovers, rather than the expected value. Unlike other studies that have tended to focus on banks, they also bring in non-banks such as insurers and broker-dealers, though data limitations mean these have to be