Systemic risk in banking systems is a crucial issue that remains to be completely addressed . In our toy model, banks are exposed to two sources of risks, namely, market risk from their investments in assets external to the  system and credit risk from their lending in the interbank market. By and large, both risks increase during severe financial turmoil. Under this scenario, the paper shows how both the individual and the systemic default tend to coincide.
Systemic risk in banking systems remains a crucial issue that it has not been completely understood . In our toy model, banks are exposed to two sources of risks, namely, market risk from their investments in assets external to the banking system and credit risk from their lending in the interbank market. By and large, both risks increase during severe financial turmoil. Under this scenario, the paper shows the conditions under which both the individual and the systemic default tend to coincide.
R
is
remains
R
remains to be completely addressed
it has not been completely understood
A
banking
R
how
the conditions under which