Before revision: The scope of financial systemic risk research encompasses a wide range of  channels and effects, including asset correlation shocks, default contagion, illiquidity contagion, and asset firesales. For example, insolvency of a given bank will create a shock to the asset side of the balance sheet of each of its creditor banks and under some circumstances, such "downstream" shocks can cause further insolvencies that may build up to create what is called an insolvency or default cascade. On the other hand, funding illiquidity that hits a given bank will create a shock to the liability side of the balance sheet of each of its debtor banks. Under some circumstances, such "upstream" shocks can cause illiquidity in further banks that may build up to create an illiquidity cascade.
After revision: The scope of financial systemic risk research encompasses a wide range of channels and effects, including asset correlation shocks, default contagion, illiquidity contagion, and asset fire sales.