IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Decline in corporate lending in Hungary and across the Central and East European region during the crisis

Listed author(s):
  • Gergely Fábián


    (Magyar Nemzeti Bank (central bank of Hungary))

  • András Hudecz


    (Magyar Nemzeti Bank (central bank of Hungary))

  • Gábor Szigel


    (Magyar Nemzeti Bank (central bank of Hungary))

Registered author(s):

    Escalation of the global financial crisis in autumn 2008 ended the economic boom in the Central and East European region, which had been financed by external funds and accompanied by dynamic expansion in credit. During the recession, corporate loan portfolios started to decline in nearly all countries in the region. The question arises as to what role banks played in this process: by restraining their credit supply, did they contribute to the deepening of the economic recession and to a slower-thannecessary recovery, or has the contraction in corporate lending resulted from shrinking corporate credit demand caused by the recession? The question is of particular relevance to Hungary, which recorded the steepest decline in corporate lending in the region. In this article, we look at 9 countries1 in Central and Eastern Europe and the Baltic States to provide a comparative presentation of developments in corporate lending and interest rates across the region and explore the reasons behind the differences observed. Available information appears to support the assumption that in Hungary – as well as in the Baltic States – the tightening of credit supply may have contributed more to the decline in corporate lending than in other countries of the region. This can be attributed primarily to Hungary’s reliance on external funds and vulnerability. At the same time, these results should be interpreted with the utmost caution for a variety of reasons. On the one hand, caution is called for because of the weakness of the analytical framework applied, as well as due to the limited reliability of the underlying data. On the other hand, the CEE region is far from homogeneous: the economic structure and development path of individual countries reveal more differences than similarities, rendering the comparison of certain aspects of the developments rather difficult.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Article provided by Magyar Nemzeti Bank (Central Bank of Hungary) in its journal MNB Bulletin.

    Volume (Year): 5 (2010)
    Issue (Month): 3 (October)
    Pages: 17-28

    in new window

    Handle: RePEc:mnb:bullet:v:5:y:2010:i:3:p:17-28
    Contact details of provider: Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:mnb:bullet:v:5:y:2010:i:3:p:17-28. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maja Bajcsy)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.