2  BIS central bankers’ speeches  The third area in which the MaRs network seeks to achieve progress is the assessment of contagion risks, addressed in Session IV. In this context the analysis of the interbank market is crucial, and the paper by Memmel and his co-authors provides very useful insights.
They confirm previous evidence of tiering in the case of Germany, where some banks distribute liquidity to others. Moreover, a relatively large share of default cases result either in a tiny loss or in a very large loss. This stands in contrast to the usual assumption that loss-givendefault averages about 40% and adds an element of fragility to the interbank system.