Euro adoption and banks profitability in Central and Eastern Europe

Jan Zájac and Wojtek Paczos
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Jan Zájac: University of Bristol

No E2025/17, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: Using panel data for 92 banks in 11 CEE countries over 2006–2020, we investigate how joining the euro affects bank profitability. Overall the effect is statistically indistinguishable from zero, but in tranquil periods euro membership lowers returns. Higher capital ratios and larger size raise profitability, whereas greater liquidity and loan intensity reduce it.

Keywords: Banks profitability; Euro adoption; Central & Eastern Europe (search for similar items in EconPapers)
JEL-codes: F36 G21 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2025-07
New Economics Papers: this item is included in nep-eec, nep-fdg and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:cdf:wpaper:2025/17

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