Eastern Europe continues to be seriously affected by the crisis. The reasons and the possibilities for the outcome of the situation were discussed by the World bank expert Fernando Montes-Negret.”Two things differentiate this region: first, the quick expansion of crediting. In Bulgaria, for example, it grew between 40 and 60 percent per year, which is a huge percentage. Second, a big part of the crediting was financed by external loans. This created several disbalances. We at the World bank observe a very important coefficient – the relation between loans and deposits. It defines what percentage of each loan is financed by the local deposit base of the banks.

If the coefficient is 100%, this means that all loans are financed by local deposits, and everything’s allright. If it is 200%, then 50 percent are financed by local loans, which is a problem. There were countries like the ones in the Baltic region with a coefficient of over 200. This means that they are very dependant on external crediting”, said Fernando Montes-Negret when explaining about the difference of the coefficient of Bulgaria.