Region’s banking sector is not yet out of the woods

This time last year, banking sectors across Emerging Europe were on the brink of collapse. Financial conditions have since stabilised, but how are the region’s banks likely to fair in 2010? In order to better assess this we have constructed a ‘Heat Map’. (See Table 1.) This grades key statistics on lending growth and banks’ funding positions according to the conditions present in past financial crises. A red ranking suggests cause for concern, whereas green suggests that conditions are benign.