Mitigating cascades in sandpile models: an immunization strategy for systemic risk?

We use a simple model of distress propagation (the sandpile model) to sh= ow how financial systems are naturally subject to the risk of systemic fail= ures. Taking into account possible network structures among financial insti= tutions, we investigate if simple policies can limit financial distress pro= pagation to avoid system-wide crises, i.e. to dampen systemic risk. We ther= efore compare different immunization policies (i.e. targeted helps to finan= cial institutions) and find that the information coming from the network to= pology allows to mitigate systemic cascades by targeting just few instituti= ons.