Analysis of the Risk Transmission Mechanisms of Investment Banks Guiding Cross-Border Capital Flows

Jijinpeng Zhang ()
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Jijinpeng Zhang: City University of Macau, Faculty of Finance

A chapter in Proceedings of the 2025 International Conference on Hybrid Commerce, Human Capital, and Economic Dynamics (ICHCH 2025), 2026, pp 524-531 from Springer

Abstract: Abstract Against the backdrop of growing financial globalization, national economies have become more deeply interconnected. Cross-border capital flows have emerged as a core area of focus for investment banks. While the mechanisms of cross-border capital intermediation have matured to some extent, significant vulnerabilities in risk transmission persist. This is evident in instances where investment banks, due to flawed risk management practices, fail to address or transmit risks in a timely manner. Based on the current situation, this study adopts a comparative case study approach to examine two representative cases: the Credit Suisse–Archegos crisis in 2021 and Deutsche Bank’s role in the European Debt Crisis (2010–2012). These two cases serve respectively as typical examples of speculative derivatives risks and sovereign debt risks. By analyzing how investment banks function as systemic nodes, exploring risk transmission mechanisms, and integrating Case Analysis, the research confirms that these institutions act as both conduits and amplifiers in cross-border capital risk dynamics. Its structural design can directly affect the breadth and depth of risk transmission.

Keywords: Cross-Border Capital; Non-cleared derivatives; Offshore Jurisdictional Arbitrage (search for similar items in EconPapers)
Date: 2026
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DOI: 10.2991/978-2-38476-585-0_58

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