Debt Overhang in Emerging Europe?

Brown, Martin; Lane, Philip R.

dc.creator	Brown, Martin
dc.creator	Lane, Philip R.
dc.date	2012-03-19T18:05:26Z
dc.date	2012-03-19T18:05:26Z
dc.date	2011-08-01
dc.date.accessioned	2023-02-17T21:00:16Z
dc.date.available	2023-02-17T21:00:16Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111011085806
dc.identifier	http://hdl.handle.net/10986/3606
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244570
dc.description	This paper assesses the extent to which debt overhang poses a constraint to economic activity in Emerging Europe, as the region emerges from the recent financial and economic crisis. At the macroeconomic level, it finds that the external imbalance problem for Emerging Europe has been in most cases more one of flows (high current account deficits in the pre-crisis years) rather than large stocks of external debt. A high reliance on equity funding means that net external debt is far lower than net external liabilities. Domestic balance sheets have expanded quite rapidly but sector liabilities remain relatively low compared with advanced economies. With the important exception of Hungary, public debt levels also remain relatively low in Emerging Europe. At the microeconomic level, the potential for debt overhang in the corporate sector is limited to a few countries: Latvia, Lithuania, Estonia, and Slovenia. Due to the low incidence of household debt, hardly any country, except Estonia, seems to face a threat of debt overhang in the household sector. The strong increase in non-performing loans compared with pre-crisis bank profitability suggests that debt overhang in the banking sector is a threat in Ukraine, Latvia, Lithuania, Hungary, Georgia, and Albania. Financial integration of Emerging Europe seems to have contributed to the transmission of the crisis to the region. At the same time, this integration is helping the region in managing the crisis by concerted actions of the major players.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5784
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ADVANCED ECONOMIES
dc.subject	ASSET POSITION
dc.subject	ASSET PRICES
dc.subject	BALANCE SHEET
dc.subject	BALANCE SHEETS
dc.subject	BANK ASSETS
dc.subject	BANK BALANCE SHEETS
dc.subject	BANK BONDS
dc.subject	BANK CREDIT
dc.subject	BANK DEBT
dc.subject	BANK FINANCING
dc.subject	BANK LENDING
dc.subject	BANK LOAN
dc.subject	BANK LOANS
dc.subject	BANK PROFITABILITY
dc.subject	BANKING CRISES
dc.subject	BANKING CRISIS
dc.subject	BANKING SECTOR
dc.subject	BANKING SYSTEM
dc.subject	BIASES
dc.subject	BOND
dc.subject	BOND ISSUANCE
dc.subject	BORROWING
dc.subject	BUSINESS CYCLES
dc.subject	CAPITAL BASE
dc.subject	CENTRAL BANK
dc.subject	COMMODITY PRICES
dc.subject	COMMON CURRENCY AREA
dc.subject	CONCEPT OF DEBT
dc.subject	CONSUMER CREDIT
dc.subject	CORPORATE DEBT
dc.subject	CORPORATE FINANCE
dc.subject	CORPORATE INVESTMENT
dc.subject	CREDIT ACCESS
dc.subject	CREDIT AVAILABILITY
dc.subject	CREDIT CARD
dc.subject	CREDIT CARD DEBT
dc.subject	CREDIT CARDS
dc.subject	CREDIT LINE
dc.subject	CREDITOR
dc.subject	CREDITOR RIGHTS
dc.subject	CREDITORS
dc.subject	CURRENCY DEPRECIATION
dc.subject	CURRENCY MISMATCH
dc.subject	CURRENCY SHORTAGES
dc.subject	CURRENT ACCOUNT
dc.subject	CURRENT ACCOUNT DEFICITS
dc.subject	DEBT
dc.subject	DEBT BURDEN
dc.subject	DEBT CRISES
dc.subject	DEBT CRISIS
dc.subject	DEBT DEFAULT
dc.subject	DEBT FINANCING
dc.subject	DEBT FORGIVENESS
dc.subject	DEBT LEVEL
dc.subject	DEBT LEVELS
dc.subject	DEBT LIABILITIES
dc.subject	DEBT LIABILITY
dc.subject	DEBT OVERHANG
dc.subject	DEBT PAYMENTS
dc.subject	DEBT PROBLEM
dc.subject	DEBT RATIO
dc.subject	DEBT RATIOS
dc.subject	DEBT RELIEF
dc.subject	DEBT RESCHEDULING
dc.subject	DEBT RESOLUTION
dc.subject	DEBT RESTRUCTURING
dc.subject	DEBTOR
dc.subject	DEBTORS
dc.subject	DEBTS
dc.subject	DEFAULTS
dc.subject	DEPOSIT
dc.subject	DEPOSIT MONEY BANKS
dc.subject	DEVELOPING COUNTRIES
dc.subject	DEVELOPING COUNTRY
dc.subject	DISTRIBUTION OF CREDIT
dc.subject	DOMESTIC BANKING
dc.subject	DOMESTIC BANKS
dc.subject	DOMESTIC CREDIT
dc.subject	DOMESTIC CURRENCY
dc.subject	DOMESTIC MARKET
dc.subject	DUMMY VARIABLE
dc.subject	EARNINGS
dc.subject	ECONOMIC ACTIVITY
dc.subject	ECONOMIC CRISIS
dc.subject	ECONOMIC GROWTH
dc.subject	ECONOMIC POLICIES
dc.subject	ECONOMIC POLICY
dc.subject	EDUCATION LEVEL
dc.subject	EMERGING ECONOMIES
dc.subject	EMERGING MARKET
dc.subject	EMERGING MARKET ECONOMIES
dc.subject	EMERGING MARKETS
dc.subject	ENTERPRISE CREDIT
dc.subject	ENTERPRISE PERFORMANCE
dc.subject	EQUITY CLAIM
dc.subject	EQUITY FINANCING
dc.subject	EQUITY FUNDING
dc.subject	EQUITY RETURN
dc.subject	EQUITY RETURNS
dc.subject	EQUITY SHARE
dc.subject	EXCHANGE RATE
dc.subject	EXCHANGE RATES
dc.subject	EXISTING CREDITORS
dc.subject	EXISTING DEBT
dc.subject	EXPORTER
dc.subject	EXTERNAL DEBT
dc.subject	EXTERNAL DEBTS
dc.subject	EXTERNAL FINANCE
dc.subject	EXTERNAL FUNDING
dc.subject	FACE VALUE
dc.subject	FAMILY BUSINESS
dc.subject	FINANCIAL ASSETS
dc.subject	FINANCIAL ASSISTANCE
dc.subject	FINANCIAL CRISIS
dc.subject	FINANCIAL DEVELOPMENT
dc.subject	FINANCIAL HEALTH
dc.subject	FINANCIAL LIABILITIES
dc.subject	FINANCIAL MARKETS
dc.subject	FINANCIAL PORTFOLIOS
dc.subject	FINANCIAL STABILITY
dc.subject	FINANCIAL STATEMENT
dc.subject	FIRM PERFORMANCE
dc.subject	FOREIGN BANKS
dc.subject	FOREIGN CURRENCY
dc.subject	FOREIGN CURRENCY LOAN
dc.subject	FOREIGN CURRENCY LOANS
dc.subject	FOREIGN DEBT
dc.subject	FOREIGN EQUITY
dc.subject	FOREIGN EXCHANGE
dc.subject	FOREIGN EXCHANGE RESERVES
dc.subject	FOREIGN INVESTORS
dc.subject	GOVERNMENT DEBT
dc.subject	GUARANTOR
dc.subject	HIGH DEBT
dc.subject	HOME IMPROVEMENT
dc.subject	HOME MARKETS
dc.subject	HOUSEHOLD DEBT
dc.subject	HOUSEHOLD INCOME
dc.subject	INCOME LEVEL
dc.subject	INCOME SHOCKS
dc.subject	INDEBTED
dc.subject	INDEBTED HOUSEHOLDS
dc.subject	INDEBTEDNESS
dc.subject	INDIVIDUAL BANKS
dc.subject	INDIVIDUAL CREDITORS
dc.subject	INFORMATION ASYMMETRIES
dc.subject	INSURANCE
dc.subject	INTEREST RATE
dc.subject	INTEREST RATE DIFFERENTIALS
dc.subject	INTEREST RATES
dc.subject	INTERNATIONAL BANK
dc.subject	INTERNATIONAL BANKS
dc.subject	INTERNATIONAL BOND
dc.subject	INTERNATIONAL DEBT
dc.subject	INTERNATIONAL DEBT SECURITIES
dc.subject	INTERNATIONAL FINANCIAL INSTITUTIONS
dc.subject	INVESTMENT ACTIVITY
dc.subject	INVESTMENT BEHAVIOR
dc.subject	INVESTMENT DECISIONS
dc.subject	INVESTMENT LOAN
dc.subject	INVESTMENT OPPORTUNITIES
dc.subject	ISSUANCE
dc.subject	LENDERS
dc.subject	LENDING DECISIONS
dc.subject	LEVEL OF DEBT
dc.subject	LEVELS OF CREDIT
dc.subject	LEVERAGE
dc.subject	LIABILITY
dc.subject	LIQUIDITY
dc.subject	LIVING STANDARDS
dc.subject	LOAN
dc.subject	LOAN LOSSES
dc.subject	LOAN PORTFOLIOS
dc.subject	LOAN QUALITY
dc.subject	LOANS FROM BANKS
dc.subject	LOCAL CURRENCY
dc.subject	LOCAL DEBT
dc.subject	LONG-TERM COST
dc.subject	LONG-TERM COSTS
dc.subject	LOWER DEBT
dc.subject	MATURITIES
dc.subject	MONETARY FUND
dc.subject	MORAL HAZARD
dc.subject	MORTGAGE
dc.subject	MORTGAGE CREDIT
dc.subject	MORTGAGE DEBT
dc.subject	MORTGAGE LOANS
dc.subject	MORTGAGES
dc.subject	MULTINATIONAL
dc.subject	NEGATIVE SHOCK
dc.subject	NEGATIVE SHOCKS
dc.subject	NET DEBT
dc.subject	NON-PERFORMING LOAN
dc.subject	NON-PERFORMING LOANS
dc.subject	NPL
dc.subject	OUTPUT LOSSES
dc.subject	OUTSTANDING STOCK
dc.subject	OVERDRAFT
dc.subject	OVERDRAFT FACILITY
dc.subject	PAYOFF
dc.subject	PENALTY
dc.subject	PENSION
dc.subject	POLICY RESPONSE
dc.subject	PRIVATE CREDIT
dc.subject	PRIVATE SAVING
dc.subject	PRIVATE SECTOR CREDIT
dc.subject	PRIVATE SECTOR LOANS
dc.subject	PROPERTY RIGHTS
dc.subject	PUBLIC DEBT
dc.subject	PUBLIC DEBTS
dc.subject	PUBLIC FUNDS
dc.subject	REAL EXCHANGE RATE
dc.subject	REMITTANCE
dc.subject	REMITTANCES
dc.subject	RENEGOTIATION
dc.subject	REPAYMENT
dc.subject	REPAYMENT DISCIPLINE
dc.subject	REPAYMENTS
dc.subject	RESERVE
dc.subject	SAVINGS
dc.subject	SELF-EMPLOYMENT
dc.subject	SHARE OF ASSETS
dc.subject	SHAREHOLDERS
dc.subject	SOVEREIGN DEBT
dc.subject	SOVEREIGN DEBTS
dc.subject	STOCKS
dc.subject	TAX
dc.subject	TRADE BALANCE
dc.subject	TRANSPARENCY
dc.subject	URBAN AREA
dc.subject	USE OF BANK CREDIT
dc.subject	VALUE OF DEBT
dc.subject	VULNERABLE HOUSEHOLDS
dc.subject	WHOLESALE BANK
dc.title	Debt Overhang in Emerging Europe?
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	Europe and Central Asia
dc.coverage	Europe and Central Asia