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

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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.

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By Piroska Nagy, Franziska Ohnsorge, Peter Sanfey

Steady private-sector led growth but increasing downside risks

Our estimate for overall growth in 2010 remains at around 4.2 per cent for the region, with upward revisions in most countries but downward revisions …

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As the global financial crisis deepened post-Lehman, trade finance saw a sharp volume drop in the EBRD region. This reflected a complex combination of demand and supply factors, although an IMF-BAFT (Bankers’ Association for Finance and Trade) survey suggests that on balance most of the contraction in trade volumes is explained by demand side effects.

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Foreign currency (FX) lending is widespread in many parts of emerging Europe, with more than half of all bank loans in Bulgaria, Estonia, Hungary, Latvia, Romania, and Serbia currently denominated in (or linked to) a …

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By Franto Ricka and Jeromin Zettelmeyer

The world has been abuzz with discussions about the implications of both simultaneous quantitative easing (QE2) in the US, UK and Japan, and capital controls and competitive depreciations in emerging markets (EMs). What would such a scenario imply for the transition region?

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Authors: Alexandre Chailloux, Franziska Ohnsorge, David Vavra

Serbia is one of the most euroized economies in Eastern Europe.

At more than 70 per cent, loan euroization in Serbia is higher than in most Eastern European countries, be they fixed exchange …

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Authors: Franziska Ohnsorge, Stephan Knobloch, Yevgeniya Korniyenko

Capital inflows have returned to many emerging markets since mid-2009.

Fuelled by abundant global liquidity and more favourable growth prospects and debt dynamics, they present better risk-return prospects than advanced economies (Chart 1)…

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By Franziska Ohnsorge and Veronika Zavacka 

Pre-crisis, underlying fiscal positions of EBRD countries were significantly worse than apparent in headline fiscal deficits.  

Until 2007, many countries in the EBRD region enjoyed high real GDP growth which inflated tax revenues and …

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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 …

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