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Crisis-hit countries that had decided as part of the transition to privatize banks to foreign investors (in order to harden budget constraints and attain macroeconomic stability) have generally navigated the crisis more successfully over the past year. Foreign banks-and other foreign lenders- exposed countries to greater risk. But crisis-hit countries with majority foreign-owned banking sectors have so far been able to roll over maturing external debt to parent banks more easily than those with majority domestic-owned banking sectors, which relied more heavily on wholesale funding. To strengthen the recovery, household and corporate financial difficulties need to be addressed upfront. Most emerging countries have an insolvency framework that can deal with bankruptcy, reorganization, and liquidation. But fledgling judicial systems can be overwhelmed when a large number of firms need restructuring - as in a systemic crisis. To expedite restructuring, governments should consider setting up a system of out-of-court voluntary workouts between debtors and creditors to expedite debt restructuring, just as the Czech Republic, Indonesia, Korea, Malaysia, Mexico, Thailand, and Turkey did in previous crises. The paper tries to present some measures for managing credit losses in the emerging countries and some features of the credit policy for the real economy in these economies. [ABSTRACT FROM AUTHOR]

The crisis that is currently affecting the international financial system introduces an additional uncertainty factor and may complicate even more the task of Central and Eastern European Countries in adopting the euro. On the one hand, the management of the real and nominal convergence is becoming more and more difficult; on the other hand, the current crisis may prove to be the most serious test to which the European financial system and the euro currency thereof are subject. In addition to these general reference points, numerous questions are raised with respect to the process of preparation of euro adoption, to the schedule of achievement thereof and to the impact of the transition to euro on those economies. The paper tries to present some arguments pro and against entering the eurozone and how can protect a single currency area its member states during the crisis period. [ABSTRACT FROM AUTHOR]

A short period of apparent resilience to the global financial turmoil has given way to a deep crisis in several European emerging markets, though with substantial differentiation across the region. While the external environment and structural reform efforts will matter, the banking sector, which has played a central role in the run-up to the crisis, holds a key to the speed of recovery from the crisis. In the short term, bank recapitalizations seem unavoidable to prevent recessions from becoming protracted. In the medium term, recovery efforts need to be supported by a strengthening of financial stability arrangements, including for cross-border activities, and the introduction of more forward-looking provisioning policies. This paper presents the situation of the Central and Eastern European Countries during the financial crisis and tries to emphasize some macroeconomic measures to overcome the crisis and the role of the prudential supervision. [ABSTRACT FROM AUTHOR]