Nowotny: Must Avoid Bubble in CESEE

Other Countries ♦ Published: November 19, 2013; 06:51 ♦ (Vindobona)

In order to avoid another asset bubble like in 2008, loan growth has to be monitored, governor of Austrian National Bank Ewald Nowotny says.

Nowotny: Must Avoid Bubble in CESEE / Picture: © Vindobona.org

ECB Governing Council member Nowotny indicates that the CESEE region is still vulnerable to asset bubbles.

In the year before 2008, foreign banks pursued an aggressive lending policy. The markets began to overheat as the inflow of foreign capital was mainly used for consumption purposes. After 2008, the non-performing loan ratio grew steadily. In the Southeast European region as…