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This paper develops a network model of interbank lending, in which banks decide to extend credit to their potential borrowers. Borrowers are subject to shocks that may force them to default on their loans. In contrast to much of the previous literature on financial networks, we focus on how anticipation of future defaults may result in ex ante "credit freezes," whereby banks refuse to extend credit to one another. We first characterize the terms of the interbank contracts and the patterns ofdoi:10.3386/w27149 fatcat:ekixugedlnakzldapfwrg6qbki