  This paper provides a general framework for modeling financial contagion in a
system with obligations in multiple illiquid assets (e.g., currencies). In so
doing, we develop a multi-layered financial network that extends the single
network of Eisenberg and Noe (2001). In particular, we develop a financial
contagion model with fire sales that allows institutions to both buy and sell
assets to cover their liabilities in the different assets and act as utility
maximizers.
  We prove that, under standard assumptions and without market impacts,
equilibrium portfolio holdings exist and are unique. However, with market
impacts, we prove that equilibrium portfolio holdings and market prices exist
which clear the multi-layered financial system. In general, though, these
clearing solutions are not unique. We extend this result by considering the
t\^atonnement process to find the unique attained equilibrium. The attained
equilibrium need not be continuous with respect to the initial shock; these
points of discontinuity match those stresses in which a financial crisis
becomes a systemic crisis. We further provide mathematical formulations for
payment rules and utility functions satisfying the necessary conditions for
these existence and uniqueness results.
  We demonstrate the value of our model through illustrative numerical case
studies. In particular, we study a counterfactual scenario on the event that
Greece re-instituted the drachma on a dataset from the European Banking
Authority.
