Did Western finance help or hinder transition in Eastern Central Europe?

Organised by

• Department of Economics
• Department of History
• Department of Law
• Max Weber Programme for Postdoctoral Studies
• Robert Schuman Centre for Advanced Studies
• Department of Political and Social Sciences
• Florence School of Transnational Governance
• Development and External Relations Service
• Finance and society

Most countries in Eastern Central Europe welcomed foreign banks to speed up their political and economic transition from authoritarian socialism. These banks, predominantly from neighbouring countries in Western Europe, often followed foreign direct investors. They helped to finance strong growth and to develop foreign investment-based economies. Households got more choice in saving and credit vehicles, notably in acquiring homeownership. However, these banks also seemed to privilege these large foreign investors over smaller businesses in the region and were suspected to put pressure on governments to provide them with selective business advantages. They were involved in fuelling mortgage market bubbles in foreign currency that threatened to bankrupt households when the bubbles burst in the financial crisis in 2008. Hungary and Latvia needed bailout programmes more than a year before Greece. To investigate this mixed record, we invited two key witnesses - Dóra Piroska, Central European University, and Thorsten Beck, Florence School of Banking and Finance (EUI) - who will be questioned by four jurors: did Western finance help or hinder transition in ECE?