  A simple banking network model is proposed which features multiple waves of
bank defaults and is analytically solvable in the limiting case of an
infinitely large homogeneous network. The model is a collection of nodes
representing individual banks; associated with each node is a balance sheet
consisting of assets and liabilities. Initial node failures are triggered by
external correlated shocks applied to the asset sides of the balance sheets.
These defaults lead to further reductions in asset values of all nodes which in
turn produce additional failures, and so on. This mechanism induces indirect
interactions between the nodes and leads to a cascade of defaults. There are no
interbank links, and therefore no direct interactions, between the nodes. The
resulting probability distribution for the total (direct plus systemic) network
loss can be viewed as a modification of the well-known Vasicek distribution.
