EBRD blog

European Bank for Reconstruction and Development

How did multinational banks weather the previous perfect storm?

Multinational banks across the world, but in particular in Europe, are experiencing severe balance-sheet pressures. Barely recovered from the 2008-09 sub-prime crisis, asset quality is now battered by banks’ exposures to sovereign risk in the euro-zone periphery. The European Banking Authority (EBA) has consequently instructed banks to increase core tier 1 capital to 9 per cent by mid-2012. This means that banks either have to raise a substantial amount of new equity, not easy in the current climate, or have to reduce their risk-weighted assets (i.e. to deleverage). International banks are also experiencing difficulties in rolling over maturing bonds. This further constrains their ability to lend, both at home and abroad. According to Morgan Stanley, banks may need to get rid of USD 3,300 billion of assets over the next couple of years. What does this imply for the host countries where these banks are operating branches and subsidiaries? This blog post presents the results of a recent working paper (De Haas and Van Lelyveld, 2011) in which Iman Van Lelyveld and de Haas compare the lending of stand-alone domestic banks with lending by multinational bank subsidiaries. We focus on the 2008-09 financial crisis, the previous ‘perfect storm’ that hit multinational banks.

Financial market stress and implications for the EBRD region

A combination of severe financial market stress, anaemic second quarter growth in key advanced countries and the deepening euro zone crisis is materially impacting the EBRD region.

Vienna Initiative: timeline for the first phase and the start of ‘Vienna Plus’

The Vienna Initiative, a framework for coordinated crisis management between EU-based cross-border bank groups in emerging Europe co-founded by the EBRD in 2009, has now reached a new phase. It has moved out of crisis management and resolution, and in to into crisis prevention. The new phase has been called Vienna Plus.

The Recovery in Credit Growth in the EBRD Region

With the exception of those countries with the largest pre-crisis credit booms, credit growth is recovering across the region.

Running for the Exit: International Banks and Crisis Transmission

In the wake of the 2007–2009 economic crisis, the virtues and vices of financial globalization are being re-evaluated. Financial links between countries, particularly bank lending, have been singled out as a key channel of international crisis transmission. The International Monetary Fund and the G-20 have identified the volatility of cross-border capital flows as a priority related to the reform of the global financial system.

Fostering growth in CEE countries: a country-tailored approach to growth policy

Co-authors: Philippe Aghion and Natalia Weisshaar

How to foster sustained growth in CEE countries

Before the onset of the global financial crisis, transition countries, particularly in Central and Eastern Europe, had embarked on what appeared to be strong and sustainable growth …

The crisis as a wake-up call

This post argues that the outbreak of the sub-prime mortgage crisis prompted banks to screen and monitor their corporate borrowers more carefully. This “wake-up call” was particularly strong for relatively opaque loans. It already materialised before the Lehman Brothers collapse …

Policy tightening at home and abroad weighs on short-term growth prospects, but should help Emerging Europe in the longer term

Authors: Franziska  Ohnsorge, Piroska M Nagy, Peter Sanfey

We’ve just published our latest update on Emerging Europe and Central Asia’s economic outlook which indicates that the recovery in the transition economies is progressing with important exceptions, and highlights the key factors …

EBRD's Annual Meeting in Zagreb

More than 2,000 people from all over the world are arriving in Zagreb, Croatia as the EBRD’s 19th Annual Meeting (AM) and Business Forum gets under way.

Participants will be able to assess the latest political, economic and social changes …

EBRD launches Transition Report 2009

Today the EBRD published its annual Transition Report, which covers the past year’s developments in countries of the EBRD region and analyses their macroeconomic performance and transition to market economies.

 
 The question this year has been whether

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