Eastern Europe's risky credit boom

The rapid pace of credit growth in the private sector has been a salient feature of the economic environment in central and eastern Europe (CEE) over the past few years. In a number of countries, bank credit has expanded by 4-5% of GDP for several years in a row. This has sparked a debate over whether the credit boom in CEE reflects a normal and expected "financial deepening" - a steady rise in credit-to-GDP ratios as countries in the region catch up with advanced market economies in an

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