Review Article

Mathematical Modeling and Stability Analysis of Systemic Risk in the Banking Ecosystem

Table 1

Parameters and their meaning.

ParameterDescription

The new rate of contagion risk caused by interactions between undistressed or risk-free banks and banks who are distressed
The rate at which the risk-exposed banks turn back to the undistressed banks
The rate at which the risk-exposed banks move to the risk-distressed class
The rate at which the distressed banks become recovered and move to the recovered class
The rate at which the distressed banks become liquidated
The rate at which the recovered banks loose immunity and turn back to the vulnerable class