In this paper, we study the drivers of permanent and transitory deposit dollarization for a sample of CESE countries using panel cointegration techniques. The results suggest that a positive cointegration relationship exists between permanent dollarization and Minimum Variance Portfolio (MVP)...

The dollarization of bank deposits in developing economies may result in a currency mismatch in domestic banking activities, as recent literature has suggested. This may, in return, increase financial fragility, create balance sheet problems, and affect bank profitability in such economies. This...