EconPapers    
Economics at your fingertips  
 

Addressing private sector currency mismatches in emerging Europe

Jeromin Zettelmeyer (), Piroska M. Nagy and Stephen Jeffrey
Additional contact information
Piroska M. Nagy: EBRD
Stephen Jeffrey: University of Warwick

No 115, Working Papers from European Bank for Reconstruction and Development, Office of the Chief Economist

Abstract: This paper provides a survey of the theoretical and empirical literature on the dollarisation of corporate and household liabilities; presents evidence on the causes of FX lending specifically in transition economies; and proposes a set of criteria to help decide on the right policy response based on country characteristics. These criteria particularly affect the extent to which regulation should be part of the policy response. Regulation to contain FX mismatches is useful in relatively advanced countries in which small market size and/or proximity to the euro make it difficult to fully develop local currency capital markets. In contrast, regulatory responses could be counterproductive in less advanced countries with high macroeconomic volatility. In these countries, the route to de-dollarisation first and foremost requires the strengthening of macroeconomic institutions.

JEL-codes: O1 P2 P5 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-ifn and nep-tra
Date: 2010-06
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (7) Track citations by RSS feed

Forthcoming in "Financial Market Regulation and Reforms in Emerging Markets", Masahiro Kawai and Eswar Prasad, eds., Brookings Institution Press 2010.

Downloads: (external link)
http://www.ebrd.com/downloads/research/economics/workingpapers/wp0115.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:ebd:wpaper:115

Access Statistics for this paper

More papers in Working Papers from European Bank for Reconstruction and Development, Office of the Chief Economist
Contact information at EDIRC.
Series data maintained by Olga Lucas ().

 
Page updated 2014-10-12
Handle: RePEc:ebd:wpaper:115