Eastern Europe Must Coordinate to Stem Deleveraging, Simor Says

Central and eastern European regulators need closer coordination to stem deleveraging by foreign banks and avoid a credit crunch threatening some countries, Hungarian central bank President Andras Simor said.

“European bank deleveraging -- although to different degrees -- is clearly a serious risk for CEE countries,” Simor said in a speech in London today. “A disproportionately high degree of deleveraging in” the region “can have large effects on the region’s credit supply and may hamper the recovery process. Regulatory vigilance is therefore justified and, importantly, has to occur in a coordinated fashion.”

To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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