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Case Study of Three German Banks Stuck in the Subprime Crisis

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  • Peixin Zhang

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper is aimed at finding banks' destabilizing behaviors that explain why the impact of the crisis is so serious in the banking system. By comparing three German banks stuck in the crisis, I find that: I) the leverage is a common destabilizing factor and, ii) the banks were highly interconnected to other financial institutions and had a large maturity mismatch were more seriously affected by the crisis.

Suggested Citation

  • Peixin Zhang, 2010. "Case Study of Three German Banks Stuck in the Subprime Crisis," Working Papers hal-04140908, HAL.
    • Handle: RePEc:hal:wpaper:hal-04140908
    Note: View the original document on HAL open archive server: https://hal.science/hal-04140908
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    References listed on IDEAS

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    1. Martin Hellwig, 2009. "Systemic Risk in the Financial Sector: An Analysis of the Subprime-Mortgage Financial Crisis," De Economist, Springer, vol. 157(2), pages 129-207, June.
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    4. Jean-Charles Rochet & Jean Tirole, 1996. "Interbank lending and systemic risk," Proceedings, Board of Governors of the Federal Reserve System (U.S.), pages 733-765.
    5. Heid, Frank, 2007. "The cyclical effects of the Basel II capital requirements," Journal of Banking & Finance, Elsevier, vol. 31(12), pages 3885-3900, December.
    6. Hyun Song Shin, 2009. "Reflections on Northern Rock: The Bank Run That Heralded the Global Financial Crisis," Journal of Economic Perspectives, American Economic Association, vol. 23(1), pages 101-119, Winter.
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