HIGHLIGHTS
SUMMARY
For both the original network and the optimized network, the authors apply a shock and simulate the propagation of the shock through the network. To achieve this, the authors first develop a one-stage optimization algorithm which the authors will describe in section "Interbank network optimization model", and then based on this algorithm, the authors develop an algorithm that has better efficiency called two-stage optimization that the authors will describe in section "Optimization model with network partitioning". The inner sum over i is the total loss of all banks in the network due . . .
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