Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154501
Authors: 
Winkler, Adalbert
Beck, Roland
Year of Publication: 
2006
Series/Report no.: 
ECB Occasional Paper 48
Abstract: 
This paper – based on a report by a Task Force established by the International Relations Committee (IRC) of the European System of Central Banks (ESCB) – reviews macroeconomic and financial stability challenges for acceding (Bulgaria and Romania) and candidate countries (Croatia and Turkey). In an environment characterised by strong growth and capital inflows, the main macroeconomic challenges relate to the recent pick-up of inflation and the large and widening current account deficits. Moreover, rapid credit growth has been a recent feature of financial development in all countries and thus constitutes the main financial stability challenge. In general, monetary authorities have responded to these challenges by tightening monetary conditions and prudential standards, with concrete measures also reflecting the different monetary and exchange rate regimes in the region. The paper also highlights four specific features of financial development in the countries under review, namely the dominance of banks in financial intermediation, the strong participation of foreign-owned banks, the widespread use of foreign currencies and the strengthening of supervisory frameworks.
Subjects: 
South-East Europe
macroeconomic performance
credit growth
financial stability.
JEL: 
E65
G21
G38
O16
P27
Document Type: 
Research Report

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