East Europe Must Act to Support Local-Currency Loans

Eastern Europe’s policy makers must strengthen their economies and curb inflation to prevent foreign-currency loans from risking stability again, the European Bank for Reconstruction and Development said.

The London-based development bank has led discussions in the past year with the International Monetary Fund, the European Central Bank, regulators and banks on how to wean the region off foreign-currency financing, which pushed some countries to the verge of default during the global credit crisis, the bank said in its annual transition report, published today.