Bulgarian politicians wear protective suits during debates in the parliament in Sofia on Friday
Can banks and policymakers in emerging Europe put aside their differences and work together to support the real economy? That’s the question many bankers in the region are asking as the Covid-19 crisis gains momentum.
Already, authorities in countries across central and south-eastern Europe (CESEE) have indicated they expect banks to step in to help their customers, either by deferring payments on existing loans or extending new credit to hard-pressed businesses.
Unsurprisingly, Hungary has been the most aggressive, with policymakers demanding a moratorium on all loan repayments until the end of this year, but even relatively moderate governments – such as that in Croatia – have mooted similar, if shorter-dated, schemes.
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For the most part, banks are happy to comply. For one thing, as Hannes Mösenbacher, the chief risk officer of Raiffeisen Bank International (RBI), pointed out on the Austrian group’s annual reports call last week, in many cases it makes business sense.
