Table of Contents

Post-Crisis Growth and Integration in Europe

Post-Crisis Growth and Integration in Europe

Catching-up Strategies in CESEE Economies

Edited by Ewald Nowotny, Peter Mooslechner and Doris Ritzberger-Grünwald

Against the backdrop of the financial crisis that unfolded in 2008, this book deals with policy challenges going forward, focusing in particular on the ongoing catching-up process in Central, Eastern and South-Eastern European countries.

Chapter 25: Banking Challenges in the CESEE Region from the Erste Group Perspective

Andreas Treichl

Subjects: economics and finance, financial economics and regulation

Extract

Andreas Treichl Let me start with some good news. Eastern Europe, including Russia, is catching up with the other emerging markets relatively fast, and we believe that by 2012 it will be coming close to the kind of growth rates we are having in Asia or in Latin America, leaving Western Europe and the rest of the world way behind (see Table 25.1). This leads to more good news. Emerging markets’ savings rates were higher than those of the developed world in the past, and they will also be higher in the future (see Figure 25.1). Therefore, if you talk about liquidity, if you talk about potential loan-to-deposit ratios, healthy loan-todeposit ratios, it is not the deposit base that should be the problem in the future of the CEE region: the problem may well be the growth of lending. Let me make one point, which, I think, is incredibly serious but which is completely misunderstood by many regulators, by central bankers and by people overall. Banks have been told again and again that they have to think about capital markets. We are being told that we have to clean up our balance sheets and that we have to think about capital markets. Table 25.1 Real GDP growth (in per cent) 2010 North America Latin America Western Europe Eastern Europe & CIS Middle East & N. Africa Sub-Saharan Africa Asia, Australia & Pacific Source: EIU. 2011 2.0 3.6 1.1 3.6 4.5 5.0 4.7 2012 2.1 4.1 1.4 4.2 4.5 n.a. 5.0 2.7 5.2 1.6...

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