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Emerging problems, secretive central banks

The global credit market complications will not leave Central-East Europe intact, said Varel Freeman, the first vice president of the European Bank for Reconstruction and Development (EBRD).

Freeman spoke to the economic daily Financial Times, trying to temper the expectations that the region might ride out the upheavals caused by the US subprime crisis. The risks are definitely higher on the CEE markets now than six months ago. The financial sector is slow at realizing the danger while the governments and central banks seek to show the best possible picture about their economies, he said. As a warning sign, Freeman mentioned the increase of the risk-margins, referring to the fact, as an example, that the risk premium of the Russian debt on the market has grown from 0.4 to 1.0 percentage point. The daily also cited György Surányi, ex-governor of Hungary’s central bank MNB and regional director of banking group Intesa Sanpaolo, as saying that the region cannot escape the risks born on the world market. The credit rating company Fitch Ratings expects the rate of the expansion in the export-market of the 20 largest emerging economies to slow down from 17% to 10%. (Gazdasági Rádió)