tailieunhanh - FOREIGN BANKS IN EMERGING EUROPE

Any study forecasting conditions four decades hence will be faced with large uncertainties and these need to be borne in mind in interpreting the results of this study. One uncertainty concerns the pathway of GHG emissions. To address that issue, the city case studies examined both a high and a low GHG emissions scenario to bracket the likely future conditions. In the climate change downscaling methodologies, there are uncertain- ties in forecasting the increase in extreme and seasonal precipitation under the different sce- narios. The techniques applied in the statistical downscaling examined the results from sixteen atmosphere-ocean general circulation models (AOGCM). Robust. | SUMMARY Based on survey data from 193 banks in 20 countries we provide the first bank-level analysis of the relationship between bank ownership bank funding and foreign currency FX lending across emerging Europe. Our results contradict the widespread view that foreign banks have been driving FX lending to retail clients as a result of easier access to foreign wholesale funding. Our cross-sectional analysis shows that foreign banks do lend more in FX to corporate clients but not to households. Moreover we find no evidence that wholesale funding had a strong causal effect on FX lending for either foreign or domestic banks. Panel estimations show that the foreign acquisition of a domestic bank does lead to faster growth in FX lending to households. However this is driven by faster growth in household lending in general not by a shift towards FX lending. Martin Brown and Ralph De Haas Economic Policy January 2012 Printed in Great Britain CEPR CES MsH 2012. FOREIGN BANKS IN EMERGING EUROPE 59 Foreign banks and foreign currency lending in emerging Europe Martin Brown and Ralph De Haas University of St Gallen European Bank for Reconstruction and Development 1. INTRODUCTION Unhedged foreign currency FX borrowing is seen as a major threat to financial stability in emerging Europe. More than 80 of all private sector loans in Belarus Latvia and Serbia are currently denominated in or linked to a foreign currency and the share of FX loans also exceeds that of domestic currency loans in various other countries including Bulgaria Hungary and Romania European Bank for Reconstruction and Development EBRD 2010. FX borrowing throughout the region is dominated by retail loans household mortgages consumer credit and small business loans to clients which typically have their income and assets in local currency. It is therefore not surprising that national authorities have taken measures to dis- This paper was presented at the 53rd Panel Meeting of Economic Policy in Budapest. We would .