Credit Growth in Emerging Europe : A Cause for Stability Concerns?

High credit growth in Emerging Europe,
generally considered a sign of catching-up with the
"old" Europe, has begun receiving considerable
attention among investors and policymakers alike. Given
heightened global risks and the demands under the European
Union accession process, the need to better understand this
high credit growth's drivers, riskiness, and the
possible macroeconomic and financial stability consequences
is strong. The authors adopt a holistic approach in
reviewing the rapid credit growth experienced in the region,
examining macroeconomic, financial sector, corporate sector,
and asset market consequences and possible vulnerabilities.
They consider three possible scenarios-a catching-up with
older European countries, a soft landing as experienced by
Portugal in the early 2000s, and a hard landing as
experienced by Asia in 1997.