  I show the equivalence between a model of financial contagion and the
threshold model of global cascades proposed by Watts (2002). The model
financial network comprises banks that hold risky external assets as well as
interbank assets. It is shown that a simple threshold model can replicate the
size and the frequency of financial contagion without using information about
individual balance sheets. Keywords: financial network, cascades, financial
contagion, systemic risk.
