What Are the Transmission Channels in a Financial Crisis?

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In the 2008 financial crisis, problems originating in the U.S. banking sector had effects not only on other parts of the U.S. economy but also internationally. In this video, JÖRG ROCHOLL sets out to identify the transmission channels through which such problems spread. Focusing, in the first instance, on how the 2008 crisis affected German banks, Rocholl observes that German corporate and retail customers saw their borrowing opportunities curtailed in cases where their bank was heavily invested in US markets. Highlighting several other transmission channels which allow financial difficulties to spread, Rocholl presents important recommendations on how the widespread effects of such shocks can be limited in the future.

DOI:

https://doi.org/10.21036/LTPUB10705

Tags:

Financial Crisis

Bank Regulation

Researcher

Professor Jörg Rocholl is President of the European School of Management and Technology (ESMT), Berlin where he also holds the EY Chair in Governance and Compliance. Rocholl also holds several other research and advisory positions including membership of the Economic Advisory Board to the German Ministry of Finance. Having completed his PhD at Columbia Business School (New York), Rocholl’s main research interests include corporate finance, corporate governance and financial intermediation. Recipient of the European Central Bank’s Wim Duisenberg Fellowship in 2013, Rocholl’s expertise is regularly sought out by media outlets including The Economist, the BBC, CNN and Al Jazeera.

Institution

European School of Management and Technology (ESMT)

ESMT Berlin was founded by 25 leading global companies and institutions. The international business school offers a full-time MBA, an executive MBA, a master's in management, as well as open enrollment and customized executive education programs. ESMT focuses on three main topics: leadership, innovation, and analytics. ESMT faculty publishes in top academic journals. Additionally, the business school provides an interdisciplinary platform for discourse between politics, business, and academia. It is based in Berlin, Germany, with a branch office in Shanghai, China. ESMT is a private business school with the right to grant PhDs and is accredited by the German state, AACSB, AMBA, EQUIS, and FIBAA. www.esmt.org

Original publication

Breaking the Doom Loop: The Euro Zone Basket

Matthes Dietrich and Rocholl Jörg

ESMT White Paper

Published in 2017

Where Did the Greek Bailout Money Go?

Rocholl Jörg and Stahmer Axel

European School of Management and Technology (ESMT) Working Paper

Published in 2016

Global Retail Lending in the Aftermath of the US Financial Crisis: Distinguishing Between Supply and Demand Effects

Rocholl Jörg, Puri Manju and Steffen Sascha

Journal of Financial Economics

Published in 2011

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