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wiiw Seminar Series
'Crisis Management in Central, East and Southeast Europe: What is
to be done?' |
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Jeromin
Zettelmeyer, Director for Policy Studies, European Bank
for Reconstruction and Development
Development Through Financial Integration? Lessons from Emerging
Europe
27 January 2010, 4 p.m. |
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Financial
integration - in the form of large debt and foreign direct investment
flows, and an increasing presence of foreign banks - has been
an integral part of the development model of emerging Europe
over the last decade. The region's slide into deep recession
has raised questions about this model. The presentation will
argue three points. First, the role of financial channels in
the transmission of the crisis to emerging Europe is more subtle
than it appears at first. While financial contagion obviously
played a role, foreign bank ownership mitigated the capital
flow reversal and the output decline. Second, unlike other emerging
market regions, both macroeconomic and sector-level evidence
shows that financial integration has boosted long-term growth
in emerging Europe. Third, the process of financial integration
- particularly large inflows of foreign financing - contributed
to credit booms, excess leverage, and foreign currency lending
that made the region vulnerable. Going forward, the challenge
will be to embrace financial integration while better managing
its risks.
Jeromin Zettelmeyer is Director for Policy Studies at the European
Bank for Reconstruction and Development, where he heads research
and country economic analysis. In this capacity, he headed the
team writing the 2009 EBRD Transition Report ‘Transition in
Crisis?’ and co-authored several chapters and background papers
of the report. From 1994 until mid-2008, he worked at the International
Monetary Fund, among others as an economist in the European
II Department; as deputy head of regional studies in the Western
Hemisphere Department; and, for over ten years, in the Research
Department, where his research interests included financial
crises, sovereign debt, international financial architecture
and economic growth. He is the author, together with Federico
Sturzenegger, of the publication Debt Default and Lessons
from a Decade of Crises (MIT Press, 2007), an account of
the sovereign debt crises of the last ten years. He is a German
citizen, was born in Spain in 1964, graduated from the University
of Bonn in 1990, and holds a Ph.D. from MIT (1995). |
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