1 / 10

CESEE Deleveraging and Credit Developments Ruben Atoyan (IMF)

CESEE Deleveraging and Credit Developments Ruben Atoyan (IMF). BIS reporting banks continue to reduce funding to CESEE; pace remains the same. CESEE : External Positions of BIS-reporting Banks, 2013:Q1 - 2013:Q4 (Change , Percent of 2013 GDP *).

sana
Download Presentation

CESEE Deleveraging and Credit Developments Ruben Atoyan (IMF)

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. CESEE Deleveraging and Credit Developments Ruben Atoyan (IMF)

  2. BIS reporting banks continue to reduce funding to CESEE; pace remains the same CESEE: External Positions of BIS-reporting Banks, 2013:Q1 - 2013:Q4 (Change, Percent of 2013 GDP*) CESEE: Change of External Positions of BIS-reporting Banks, 2011:Q1-2013:Q4 (Percent of 2013 GDP) Sources: BIS, Locational Banking Statistics; and IMF staff calculations.

  3. Cumulative reductions significant for many CESEE: External Positions of BIS-reporting Banks, 2009-2013 (Change, Percent of 2013 GDP) CESEE: External Position of BIS-reporting Banks, 2003:Q1-2013:Q4 (Billions of US$, exchange-rate adjusted, vis-à-vis all sectors) Sources: BIS, Locational Banking Statistics; and IMF staff calculations.

  4. Credit growth to NFCs remains subdued outside CIS & Turkey CESEE: Growth of Credit to Households and Corporations, Dec 2013 (Percent change, year-on-year, nominal, exchange-rate adjusted) Credit to Private Sector, Jan 2009 - Jan 2014 (Percent change, year-over-year, nominal, exchange-rate adjusted) Sources: National authoritiesand EBRDstaff calculations. Sources: National authorities and EBRD staff calculations.

  5. HH credit shows signs of revival, deposit growth continues CESEE: Growth of Credit to Households, Jan 2009 to January 2014 (Percent change, year-on-year, nominal, exchange-rate adjusted) CESEE. Evolution of Main Bank Funding Sources, 2007Q1 – 2013Q4 Total (percent of GDP) Notes: CESEE excl. Russia and Turkey; y-o-y change in BIS banks’ exposure and domestic deposits in percent of GDP, exchange-rate adjusted. Sources: BIS Locational Banking Statistics; IMF, International Financial Statistics; and IMF staff calculations. Sources: National authorities and EBRD staff calculations.

  6. IIF survey suggests no improvement in bank funding conditions and still tight credit standards EM Europe Bank Lending Conditions Survey Q4 2013 (Values above 50 indicate improving conditions; values below 50 indicate deteriorating conditions) Sources: IIF.

  7. What Matters for Funding: Domestic Factors Important Explaining Change in BIS Banks’ Positions since 2008Q2: Relative Importance of External and Domestic Factors Sources: CESEE Regional Economic Issues Spring 2014, forthcoming

  8. LD ratio coming down, NPL outlook more upbeat CESEE. Evolution of NPLs during last 3 months and expected evolution in the next 3 months (Values above 50 indicate improving conditions; values below 50 indicate deteriorating conditions) CESEE. Evolution of Loan to Deposit Ratio, 2004M3 – 2013M12 Sources: IMF, Monetary and Financial Statistics; IMF, International Financial Statistics; and IMF staff calculations. * Excludes loans and deposits from other financial institutions. Derived from Standardized Reporting Forms. May differ from "headline" ratios reported by national authorities. In the case of Russia, derived from IFS as ratio of claims on the private and nonfinancial public sectors to all deposits. Sources: IIF.

  9. Portfolio flows rebounded in Q4But market conditions remain volatile Capital Flows (excluding Turkey and Russia), 2009:Q1 – 2013:Q4 (Billions of US dollars, bop data) CESEE: EMBIG Spreads Indices, 2013 Jan - 2014 Apr (May 21, 2013 = 100) Sources: Bloomberg; and IMF staff calculations Sources: Haver Analytics; IMF, World Economic Outlook database; and IMF staff calculations

  10. Main points and issues for discussion: • Western banks’ pullback from CESEE region continues, pace seems slower (excluding Russia and Turkey). Q-n: Is there a risk of pick-up? Is it largely complete in countries where loans-to-deposits ratios are around or below 100 percent? • Credit decline seems to be bottoming out at least in the HH sector; credit still declining for NFCs. Q-n: What is holding back investment demand? What does this imply for a return of domestic demand outside CEE? With funding and credit conditions still tight, if demand picks up, will there be supply constraints? • Q4 saw an improvement in financial conditions, but going forward, further tightening and bouts of volatility is likely. Q-n: Are there significant risks for CESEE?

More Related