We show that multinational firms transmit shocks across countries through their internal capital markets. We study a credit supply shock to parent firms in Germany. International affiliates outside Germany supported their parents through internal lending, became financially constrained...

We show that multinational firms transmit shocks across countries through their internal capital markets. We study a credit supply shock to parent firms in Germany. International affiliates outside Germany supported their parents through internal lending, became financially constrained...

CII Introduction: how much financial services regulation is appropriate to protect the public while promoting a free market has been a key debate within the industry and government in recent years, especially after the financial crisis and on the eve of a general election.[...]