  We provide an overview of the relationship between financial networks and
systemic risk. We present a taxonomy of different types of systemic risk,
differentiating between direct externalities between financial organizations
(e.g., defaults, correlated portfolios and firesales), and perceptions and
feedback effects (e.g., bank runs, credit freezes). We also discuss optimal
regulation and bailouts, measurements of systemic risk and financial
centrality, choices by banks' regarding their portfolios and partnerships, and
the changing nature of financial networks.
