Bank Funding in Central, Eastern and South Eastern Europe Post Lehman : A “New Normal”?

Author/Editor: Gregorio Impavido ; Heinz Rudolph ; Luigi Ruggerone
Publication Date: June 19, 2013
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: CESEE banks are reducing foreign funding sources in response to reduced external imbalances, reduced ability to tap international savings, banking group own strategies, initiatives by some regulators, and consistently with uncertainties surrounding the future of the banking union project. In the medium term, the global regulatory agenda and the high foreign presence and stock of FX loans exert opposite forces on rebalancing trends. In the long-term, any funding “new normal” will be determined by the future design of the EU financial architecture. In the meantime, limiting leverage, the use of FX loans and promoting aggregate saving through macro policies and capital market reforms will increase resilience against shocks going forward.
Series: Working Paper No. 13/148
Subject(s): Banks | Central and Eastern Europe | International banking | External financing

Publication Date: June 19, 2013
ISBN/ISSN: 9781484391082/1018-5941 Format: Paper
Stock No: WPIEA2013148 Pages: 47
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