Walking the Tightrope: A First Glance on the Impact of the Recent Global Financial Market Turbulence on Central, Eastern and Southeastern Europe

Sandor Gardo, Antje Hildebrandt () and Zoltan Walko ()
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Antje Hildebrandt: Oesterreichische Nationalbank, Foreign Research Division, http://www.oenb.at
Zoltan Walko: Oesterreichische Nationalbank, http://www.oenb.at

Financial Stability Report, 2008, issue 15, 119-140

Abstract: The Central, Eastern and Southeastern European (CESEE) countries have, to some extent, felt the impact of the international financial market turbulence observed since July 2007. While CESEE markets tended to follow the negative global investor sentiment in general, they performed relatively well compared to other emerging markets. Overall, increases in risk premiums and asset price losses were rather contained in the region, which may reflect a positive impact on investor judgment induced by EU convergence. However, the fact that the financial turmoil had a stronger impact on countries with weaker economic fundamentals and/or insufficient policy credibility shows that correcting overly large economic imbalances remains imperative in a relatively fragile international environment.

Keywords: Financial markets; economic vulnerabilities; Central, Eastern and Southeastern Europe; CESEE (search for similar items in EconPapers)
JEL-codes: G15 O16 O52 (search for similar items in EconPapers)
Date: 2008
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