Liquidity Hoarding in Financial Networks: The Role of Structural Uncertainty

Figure 11

Standard deviation of confidence across complete information (CI) and local information (LI) scenarios and three shock treatments: to a small bank, a large bank, and multiple small banks. The LI1 scenario inflates standard deviations of confidence in both single-bank-shock treatments. The multiple-bank treatment involves a number of small banks whose total assets amount to the assets of a single large bank. LI1 and LI2 = scenarios in which a bank has access only to information from banks up to distance 1 and 2, respectively (Figure 16 in Appendix A displays all scenarios).