We study how multinational firms transmit shocks across countries through their internal capital markets. We identify a lending cut by a single German bank, which reduced the credit supply of multinational parents located in Germany. Using detailed data on internal capital markets, we show that multinationals adjusted internal capital flows toward affected parents and away from international affiliates. Affiliate sales fell sharply and recovered after three years. The results indicate that preexisting internal capital market positions can be used to predict the degree of cross-country shock transmission and that idiosyncratic shocks from “granular” banks in one country affect growth internationally.