Determinants of Foreign Currency Borrowing in the New Member States of the EU

By Christoph B. Rosenberg, Marcel Tirpák. Social Science Research Network, 2008

163 citations recorded by the source corpus.

The paper investigates the determinants of foreign currency borrowing by the private sector in the new member states of the European Union. We find that striking differences in patterns of foreign currency borrowing between countries are explained by the loan-to-deposit ratios, openness, and the interest rate differential. Joining the EU appears to have played an important role, by providing direct access to foreign funding, offering hedging opportunities through greater openness, lending credibility to exchange rate regimes, and raising expectations of imminent euro adoption. The empirical evidence suggests that regulatory policies to slow foreign currency borrowing have had only limited success.

View Paper: https://www.semanticscholar.org/paper/952cf44957dc84d221080f93d2231d62cd417365

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

1. B. Bakker
2. Anne-Marie Gulde
3. Zhou Lu

Citations in the corpus

• The Credit Boom in the EU New Member States: Bad Luck or Bad Policies? (2010, background): “32 Rosenberg and Tirpák (2008) also concluded that the "growing dollarization of liabilities in the NMS can be primarily explained by the interest rate differential and the extent to which credit is funded from abroad.”
• Determinants of Bank Credit in Emerging Market Economies (2011, unknown): “In certain EMEs—for example Croatia, Estonia, and Latvia—foreign currency loans may represent a significant portion of private credit, as emphasized in Rosenberg and Tirpák (2008).”