In Hungary in the pre-crisis period, the bank sector-initiated private credit boom significantly contributed to the accumulation of economic imbalances. Nevertheless, before the 2008 crisis no special regulatory measure was taken to mitigate the foreign exchange lending to unhedged borrowers,...

We analyze the relative roles of subsidiary and parent banking group traits in driving foreign banks' lending patterns in the Central and Eastern European (CEE) region before and during the crisis. We use a bank-level dataset on Western European banking groups and their CEE subsidiaries over the...