IMF: Higher Risks for Austrian Banks in CESEE
In an interview with the Austrian news magazine “Presse”, IMF´s Executive Director Johann Prader explained that the European debt crisis has arrived in Central, East and Southeast Europe.
According to Prader, the euro-crisis also affects non-Eurozone members in the European periphery. For Austrian banks, another shock in CESEE countries may cause substantial difficulties, Prader says.
At the moment, the euro-crisis is a risk factor for Austrian banks. However, the risk is still manageable, Prader says. The economist explains that Austrian banks become more stable in the last two years, though. “Risks for banks increased undoubtedly, but it is not alarming yet.”
Prader thinks that the spillover effect in CESEE countries will hold on in the next quarters. The economic growth rates in CESEE were down remarkably, he says. Prader explains that the crisis which came up in 2008 may hold on for eight years or even longer. “In Japan, however, the crisis still continues after 22 years.” Anyway, the crisis in the Eurozone will not disappear soon, Prader states. On average, a financial crisis lasts for eight years, he adds.
Regarding the euro-crisis, Prader explains that the crisis management would be ineffective. Often, the barriers are not economical, but political, he argues. “The global economy has difficulties to find the necessary patience for the situation in Europe.”