After completing an apprenticeship at the BHF-Bank, Krahnen studied business administration at the Goethe University Frankfurt where he earned a PhD in 1984.
Four years later he received his postdoctoral lecture qualification (habilitation) from the Freie Universität Berlin.
Between 2008 and 2012 Krahnen was a member of a German government expert group that drew up proposals on how to reform international financial markets.
Krahnen is a member of the Group of Economic Advisors (GEA) of the European Securities and Markets Authority (ESMA) in Paris and a member of the Academic Advisory Board of the German Federal Ministry of Finance.
Krahnen was the only German member of this group which was chaired by Erkki Liikanen, Governor of the Bank of Finland, and consisted of eleven people in total.