  Based on an empirical analysis of the network structure of the Austrian
inter-bank market, we study the flow of funds through the banking network
following exogenous shocks to the system. These shocks are implemented by
stochastic changes in variables like interest rates, exchange rates, etc. We
demonstrate that the system is relatively stable in the sence that defaults of
individual banks are unlikely to spread over the entire network. We study the
contagion impact of all individual banks, meaning the number of banks which are
driven into insolvency as a result of a single bank's default. We show that the
vertex betweenness of individual banks is linearly related to their contagion
impact.
