Households’ Foreign Currency Borrowing in Central and Eastern Europe

Foreign currency loans represent an important feature of recent financial developments in CEECs. This might pose a serious challenge for macroeconomic stability. Against this background, we study the determinants of foreign currency loans of households, using data on the behavior of households in nine CEECs. Our results reveal that foreign currency loans are driven by households’ lack of trust in the stability of the local currency and in domestic financial institutions. Moreover, special factors including remittances and expectations of euro adoption play an important role in selected regions. The financial crisis reduced foreign currency borrowing, but there is some indication this effect might be only temporary

Projektbeginn: 01.05.2011
Projektende: 31.12.2013

Prof. Dr. Jarko Fidrmuc, Dr. Mariya Hake, Dr. Helmut Stix

Zeppelin University Friedrichshafen
Zeppelin-Lehrstuhl für Internationale Wirtschaftstheorie & -politik (eingerichtet 05 / 2011)

Am Seemooser Horn 20
88045 Friedrichshafen

Telefon: +49 7541 6009-1241
Fax: +49 7541 6009-1299
Email: jarko.fidrmuc@zu.de
http://www.zeppelin-university.de/deutsch/lehrstuehle/internationales_management/internationales_management_profil.php

• eigenfinanziertes Forschungsprojekt

• Fidrmuc, Jarko, Hake, Mariya, Stix, Helmut: Households’ Foreign Currency Borrowing in Central and Eastern Europe, Journal of Banking and Finance, 2013; Jg. 37 (6): 1880-1897.