Before revision: We extend analytic large network results on default contagion in random graphs to capture a pronounced Block Model structure. This includes as a special case the Core-Periphery network structure , which plays a prominent role in recent research on systemic risk.
After revision: One of the most defining features of modern financial networks is their inherent complex and intertwined structure. In particular the often observed core-periphery structure plays a prominent role in recent research on systemic risk.