Foreign currency loans represent an important feature of recent financial developments in CEECs. This might pose a serious challenge for macroeconomic stability. Against this background, the authors study the determinants of foreign currency loans of households, using data on the behavior of...

Bank regulation differs across countries. We show that these differences provide incentives to lend across the border. In a theoretical model we derive the foreign bank's credit supply function, showing that in the case of regulatory differences the closer firms are to the border the more likely...

We review the literature on business cycle correlation between the euro area and the Central and Eastern European countries (CEECs), a topic that has gained attention as the newest EU members approach monetary union. Our meta-analysis of 35 identified publications suggests some CEECs already...