The Drivers of Foreign Currency-Based Banking in Central and Eastern Europe

Seminar on Tourism Statistics in the Countries of Central and Eastern Europe (English version)

10.18111/9789284400911 ◽

1994 ◽

Keyword(s):

Eastern Europe ◽

Central And Eastern Europe ◽

Foreign Currency ◽

Supply And Demand ◽

Regional Level ◽

English Version ◽

Travel And Tourism ◽

Accurate Knowledge ◽

International Transactions ◽

Effective Design

The receipts generated by the development of tourism as compared to other forms of international transactions represent a significant potential growing source of foreign currency earnings for all countries of Eastern and Central Europe. To these countries, international tourism offers yet unexplored opportunities and challenges. The opportunity consists in making the best use of their natural and cultural heritage to secure the needed foreign currencies. The challenge resides in channeling the receipts obtained from tourism into productive investments providing the infrastructure for accelerating their economic development. This Seminar is the first technical meeting at the regional level organized by WTO as part of its plan for implementing the Resolutions of the 1991 Ottawa Conference on Travel and Tourism Statistics. It was also the first Seminar on tourism statistics held for Central and Eastern Europe since WTO’s inception. Its main objective was to assist these countries in taking up this challenge. The effective design and planning of the amount and type of resources to be devoted to the development and promotion of tourism requires the accurate knowledge of tourism supply and demand and of the economic impact of tourism.

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Consolidation and Legacy of Foreign Currency Household Lending in Central and Eastern Europe: The Case of Hungary

Contemporary Economics ◽

10.5709/ce.1897-9254.410 ◽

2020 ◽

Vol 14 (3) ◽

pp. 366-378

Author(s):

Pál Péter Kolozsi ◽

Csaba Lentner

Keyword(s):

Eastern Europe ◽

Central And Eastern Europe ◽

Foreign Currency

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Policy measures and failures on foreign currency household lending in central and eastern Europe

Acta Oeconomica ◽

10.1556/aoecon.61.2011.2.5 ◽

2011 ◽

Vol 61 (2) ◽

pp. 193-223 ◽

Cited By ~ 8

Author(s):

A. Bethlendi

Keyword(s):

Eastern Europe ◽

Central And Eastern Europe ◽

Foreign Currency ◽

National Policy ◽

Financial Education ◽

Fixed Rate ◽

Macroeconomic Policies ◽

Macroeconomic Imbalances ◽

Short Period ◽

Financial Liberalisation

I found that during booming years national policy makers were strongly constrained to decrease or effectively manage the risks of unhedged foreign currency lending (FCL) to households due to the economic characteristics of Central and Eastern Europe (CEE). Strong FCL growth was mainly driven by private sector consumption and investment. Foreign banking groups easily intermediated international financing into open CEE markets. International measures, which could have limited FCL, were not taken. I found an inconsistency: FCL was primarily a result of macroeconomic imbalances, but macroeconomic policies mostly proved inefficient to downsize it. Administrative measures seemed to be the most effective, however, only for a short period due to the high degree of financial liberalisation. Regulatory measures proved less efficient, while relatively frequently used supervisory actions did not have any notable effects. Financial education, moral suasion, and market development measures (with the exception of long-term, fixed rate local currency (LC) housing finance) were not efficient at all. Out of 12 investigated countries 6 had some success to limit FCL. Others did not have any efficient policy mix. Comparing the experiences of Hungary and other countries I found that the ‘we cannot do anything’ is a worse policy approach than the ‘we will try to do something’ one in spite of its deficiencies. The euro membership could not automatically eliminate FCL as the example of Slovenia shows.

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