Our study delves into the dynamics of financial contagion within the network of 32 commercial banks in Romania through the application of agent-based modeling using NetLogo. What distinguishes our study is the incorporation of government intervention into the model when default occurs in the banking network to assess its effects. Our simulations demonstrate that the level of interconnectivity between banks plays a crucial role in determining the extent of systemic risk and the spread of financial contagion within the banking network. Higher levels of interconnectivity increase the risk of contagion, highlighting the importance of understanding and monitoring interbank linkages. Additionally, our results underscore the significance of government intervention in mitigating the effects of financial contagion. We observed that higher levels of government intervention lead to a reduction in the number of banks entering default, indicating the effectiveness of policy measures in stabilizing the banking system during crises. Banks that do not default, especially those without government intervention, demonstrate resilience to financial stress. Their ability to maintain stability without external assistance emphasizes the importance of sound risk management practices and capital buffers in safeguarding against systemic shocks. The insights gained from our simulations have significant implications for policymakers and regulators. Understanding the dynamics of financial contagion and the factors influencing systemic risk can inform the development of more robust regulatory frameworks and risk management strategies aimed at enhancing the stability and resilience of the financial system.