An article in today's New York Times highlights the increasing economic problems and risks in eastern Europe.Tucker forwarded me a piece over the weekend which also focused on eastern Europe as a "problem region" for the world economy.
My understanding of what's happening: The western European banks spent several years investing heavily in Poland, Hungary, the Baltics, etc., and now people in those countries are having trouble repaying their loans in similar fashion to subprime borrowers in the US. One issue is that the loans are denominated in euros, and as the local currencies have declined relative to the euro, the amount of each repayment (in the local currency) has skyrocketed ("Since peaking last summer, Poland’s currency has slumped 48 percent against the Euro; Hungary’s has fallen 30 percent and the Czech Republic’s is off 21 percent.")
96. The NYT article says that there were protests in Kiev this past week when large numbers of depositors tried to withdraw their deposits from local banks. Do the eastern European countries have equivalents of the FDIC that protect the deposits?
